SDX Energy Regulatory News (SDX)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

FURTHER, THIS ANNOUNCEMENT IS MADE FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE OR SOLICITATION TO BUY, SUBSCRIBE FOR OR OTHERWISE ACQUIRE COMMON SHARES IN SDX IN THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY OTHER JUSRISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE SECURITIES OF SDX HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933 AS AMENDED (THE "SECURITIES ACT"), OR QUALIFIED FOR SALE UNDER THE LAW OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE COMPANY DOES NOT INTEND TO REGISTER ANY SECURITIES UNDER THE SECURITIES ACT, AND NO PUBLIC OFFERING OF SECURITIES IN THE UNITED STATES WILL BE MADE.

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.

For Immediate Release 25 January 2017

SDX ENERGY INC.

("SDX" or the "Company")

Results of Fundraising

Further to its announcement released on 24 January 2017 concerning the Fundraising and Acquisition (the "Acquisition Announcement"), the Board of SDX Energy Inc. (TSXV, AIM: SDX), the Egypt focused oil and gas company, is pleased to announce the results of the Fundraising. Unless otherwise defined, capitalised terms used in this announcement have the same meaning as set out in the Acquisition Announcement.

The Board is pleased to announce that pursuant to the Fundraising, new Common Shares have been successfully conditionally placed, or subscription agreements entered into, with new and existing investors for a total of 107,056,351 new Common Shares at a price of 30.0 pence per new Common Share, raising approximately US$40.0 million (approximately £32.1 million) in aggregate before expenses. The gross proceeds of the Fundraising will be applied toward the Acquisition of the Circle Assets, further working capital and the costs of the Acquisition and the Fundraising.

As noted in the Acquisition Announcement, the Fundraising is conditional upon the Company entering into the SPA on Admission and Admission. An application is expected to be lodged shortly for Circle Oil Jersey to be placed into administration with an Administrator expected to be appointed with effect from and conditional upon Admission. Application has been made to the London Stock Exchange for the new Common Shares to be admitted to trading on AIM, and to the TSX-V for the new Common Shares to be admitted to trading on the TSX-V; and it is expected that Admission to trading on AIM will occur on 27 January 2017. The new Common Shares will, when issued, rank pari passu in all respects with the Existing Common Shares, including the right to receive dividends and other distributions declared following Admission.

If there are any material changes to the proposed timetable and Admission is delayed, an announcement of the updated timetable will be made via a RIS.

Directors' Participation

Pursuant to the Fundraising, certain of the directors of the Company have conditionally subscribed for a total of 701,781 new Common Shares at the Placing Price. Further details of these subscriptions, and the subsequent Director shareholdings following Admission, is set out in the table below.

Major Shareholder Subscriptions

Pursuant to the Fundraising, MEA Energy Investment Company Limited has conditionally subscribed for 15,419,437 new Common Shares at the Placing Price. Following completion of the Fundraising, MEA Energy Investment Company Limited will hold 26,919,437 Common Shares, which will represent approximately 14.40 per cent. of the enlarged issued share capital of the Company.

Ingalls & Snyder LLC has also conditionally subscribed for 15,600,000 new Common Shares at the Placing Price. Following completion of the Fundraising, Ingalls & Snyder LLC will hold 27,144,902 Common Shares, which will represent approximately 14.52 per cent. of the enlarged issued share capital of the Company.

Related Party Transaction

The subscriptions for new Common Shares by MEA Energy Investment Company Limited, Ingalls & Snyder LLC, and certain of the directors in the Fundraising (as outlined above) are considered related party transactions under the AIM Rules for Companies and the Policies of the TSX Venture Exchange. Each of Ingalls & Snyder LLC and MEA Energy Investment Company Limited is a "related party" to the Company under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101") by virtue of such party's existing shareholding being in excess of 10 per cent.; in addition each director is a "related party" to the Company under MI 61-101. Accordingly, any investment by any such entity or individual will be a "related party transaction" under MI 61-101. Each such investment will be exempt from (i) the formal valuation requirements under Section 5.4 of MI 61-101 pursuant to Subsection 5.5(a) of MI 61-101 and (ii) the minority approval requirements under Section 5.6 of MI 61-101 pursuant to Subsection 5.7(1)(a) of MI 61-101 because the fair market value of each of such related party's investment does not exceed 25 per cent. of SDX's market capitalization (as defined in MI 61-101).

There are no independent directors for the purposes of the Fundraising, and the Board has received advice from Cantor Fitzgerald Europe (the Company's nominated adviser) that it considers that the terms of the Placing and Subscription are fair and reasonable in so far as the Shareholders are concerned.

Total Voting Rights

Immediately following completion of the Fundraising and Admission, the Company's issued share capital will consist of 186,900,253 Common Shares. The Company does not hold any Common Shares in treasury. This figure may be used by shareholders to determine if they are required to notify their interest in, or a change to their interest in, the Company.

The new Common Shares will represent approximately 57.28 per cent. of the total issued ordinary share capital in the Company on Admission.

Paul Welch, President and CEO of SDX, commented:

"The completion of the fundraise and acquisition of Circle Oil's subsidiaries in Egypt and Morocco will be another important step in the development of SDX Energy. The deal is an excellent strategic fit for us and, in line with our strategy of seeking high margin, low cost growth opportunities, will substantially increase production and cash flow from our asset portfolio.

"I would like to take this opportunity to thank the management team at Circle Oil for their efforts in progressing the transaction, as well as our new and existing shareholders for their ongoing support. Together with the upcoming drilling campaign at South Disouq, the outlook is extremely positive for SDX Energy as we continue to create value and build a mid-tier E&P in North Africa."

About SDX

SDX is an international oil and gas exploration, production and development company, headquartered in London, England, UK, with a principal focus on Egypt. In Egypt, SDX has an interest in two production concessions: NW Gemsa and West Gharib (Meseda) both located in the Eastern Desert. SDX's portfolio also consists of South Ramadan, a development asset in the Gulf of Suez and South Disouq, an exploration asset in the Nile Delta. For further information, please see the website of the Company at www.sdxenergy.com or the Company's filed documents at www.sedar.com.

For further information:

Disclosures

Neither the TSX Venture Exchange nor its Regulation Services Provider (as such term is defined in the polices of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cantor Fitzgerald Europe which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and for no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to Cantor Fitzgerald's clients, or for providing advice in relation to the Placing, or any other matters referred to herein.

FirstEnergy Capital LLP which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and for no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to FirstEnergy Capital LLP's clients, or for providing advice in relation to the Placing, or any other matters referred to herein.

Stifel Nicolaus Europe Limited which is authorised and regulated in the United Kingdom by the FCA, is acting for the Company and for no one else in connection with the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to Stifel's clients, or for providing advice in relation to the Placing, or any other matters referred to herein.

Inside Information

The information contained in this announcement is inside information. If you have any queries on this, then please contact Mark Reid, the Chief Financial Officer and Director of the Company (responsible for arranging release of this announcement) at 38 Welbeck Street, London, W1G 8DP on +44 (0) 203 219 5640.

Forward Looking Statements

Certain statements contained in this press release constitute "forward-looking statements" as such term is used in applicable Canadian and US securities laws. These statements relate to analyses and other information that are based upon forecasts of future results, estimates of amounts not yet determinable and assumptions of management. In particular, statements concerning the assets of Circle Oil Egypt and Circle Oil Maroc, the Acquisition, the Fundraising and the future prospects and strategy of the Company, and the results referenced or implied herein should be viewed as forward-looking statements.

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 and should be viewed as "forward-looking statements". All reserves and resources information contained herein should be considered as forward looking statements. Such forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and other factors include, among others, costs and timing of exploration and production development, availability of capital to fund exploration and development and political, social and other risks inherent in carrying on business in Egypt and Morocco. There can be no assurance that such statements will prove to be accurate as actual results and future events could vary or differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements contained in this news release.

Forward-looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements and if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable law. Although SDX has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Actual results may differ materially from those currently anticipated. SDX's Annual Information Form for the year ended December 31, 2015, filed on the Company's SEDAR profile on April 29, 2016, has a full description of the risks and uncertainties associated with the Company's business, including its exploration activities and these risk factors and uncertainties should be referred to and read in their entirety. The forward-looking statements contained herein are expressly qualified by this cautionary statement.