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SDX Energy highlights “great strides” as it reports positive first quarter

Chief executive Paul Welch said the start of the year brought good momentum, and added that the company looks forward to capitalising on the opportunities ahead.
Onshore oil drilling
New drilling continues through the rest of this year

SDX Energy Inc (LON:SDX, CVE:SDX) boss Paul Welch highlighted that the start of 2017 has been a busy period, with “great strides” made across its portfolio.

Welch noted that the start of the year brought good momentum, and added that the company looks forward to capitalising on the opportunities ahead.

In the group’s results statement, for the three months ended March 31, Welch said: “We were pleased to announce a successful drilling result at South Disouq, making a gas discovery in the first target and encountering reservoir horizons and evidence of a working petroleum system at the second target. 

“We have also made strong operational progress in Morocco and given the attractive local gas market are on track to drill seven additional wells this year to further grow our high margin production in the region.

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"We are also pleased to report that our other high margin producing assets in Egypt, North West Gemsa and Meseda, continue to perform in line with expectations.”

SDX reported net revenues of US$8.1mln, up from US$2.1mln in the same period of last year, as realised average oil prices improved drastically to US$44.38 per barrel compared to US$24.46 in the same quarter of 2016.

Net cash generated from operations rose to US$3.1mln, from US$1.8mln, and the company ended the period with US$21.1mln of cash and equivalents.

During the period the company completed its acquisition of Circle Oil’s Egyptian and Morocco business, for US$28.1mln,which added some US$57.6mln of fair value to the group’s net assets.

The company reported comprehensive income of US$26.9mln, with the acquisition accounting for a US$29.5mln gain.

Looking ahead, the company noted upcoming work programmes including a 12-well work-over programme planned at the North West Gemsa and new drilling at the Meseda asset in Egypt.

At the South Disouq asset, also in Egypt, the company is working to bring the project into production by the first quarter of next year.

In Morocco, meanwhile, the company is advancing a programme of five new wells at the Sebou asset for the second half of the year - including three development wells and two exploration wells - and it intends to increase gas volumes to existing customers and agree contracts with new customers.

At the Lalla Mimouna asset there are plans for two exploration projects in the second half.

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