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SDX Energy Plc (LON:SDX) boss Paul Welch highlights solid progress and a high level of activity across the portfolio today as the Egypt focussed hydrocarbons group released its results for 2016.
Financial results for the twelve months ended December 31 reveal revenue growth, to US$12.9mln from US$11.4mln, with net-backs up to US$7.60 per barrel from US$6.40 despite realised oil prices lowering to an average of US$31.50 from US$35.74.
It did, however, also mark a US$28.4mln non-cash write off – because of its exit out of the Bakassi West exploration project in Cameroon – which meant the company reports a US$28mln loss for the year (which excludes the acquired Circle Oil units).
SDX invested some US$13.3mln of capital in the twelve month period, with the group focussing on growth initiatives.
“I am pleased to report on the solid progress that was made throughout 2016, with high levels of activity across the entire portfolio,” said Welch, SDX president and chief executive.
“At North West Gemsa and Meseda we successfully completed extensive workover programmes, with production expected to double at Meseda over the coming months.”
The company also recently expanded with the acquisition of Circle Oil’s assets, in Egypt and Morocco.
It completed a 3D seismic exploration programme which set the scene for the South Disouq exploration, which began drilling in recent weeks.
“The successful fundraise and acquisition of Circle’s assets in Egypt and Morocco, announced in January, demonstrates our ability to deliver on SDX’s ambitious growth strategy,” Welch added.
“With increased production and cash flow as a result of the acquisition, our balance sheet has been further strengthened, leaving us well placed to progress the development of the existing portfolio, while positioning the company to capitalise on further opportunities that we are actively identifying within the North Africa region.”
The SD-X1 well, at the South Disouq project, is just one of the wells planned for this year – five are planned for the second half at the Sebou project and two are earmarked at Lalla Mimouna in Morocco, while four new wells (including two for exploration) are scheduled at the Meseda field in Egypt.
At North West Gemsa, meanwhile, the company expects it will complete a twelve well work-over programme.
SDX kicks off South Disouq exploration well
On Monday, March 20, the company told investors it has now started drilling the potentially high impact SD-1X well on the South Disouq concession, in the Nile Delta area of Egypt.
The SD-1X well is targeting both oil and gas reservoirs – gas in the upper Abu Madi section, and oil is targeted in the lower AEB & Abu Roash sections. Drilling will take between 30 and 45 days.
“We are extremely pleased to announce the start of this drilling campaign, as well as the extension to the exploration period,” said Paul Welch, SDX chief executive.
“This is one of several activities, across the expanded SDX portfolio, that has the potential to further increase our reserve base and ultimately add to our high margin production base.
“We look forward to providing updates over the course of the campaign.”
Story by ProactiveInvestors