SDX Energy PLC (LON:SDX) chief executive Mark Reid has described the first half of 2020 as ‘strong’ for the company, despite the challenges during the period.
“Production hit record levels and we made some important discoveries in both Egypt and Morocco, which have added significant value to the company's portfolio, with the Sobhi discovery, in which we have a 100% working interest, expected to be brought on stream in Q1 2021,” Reid said in the group’s interim financial results statement.
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“Our drilling success has also opened up new exploration prospects that we expect to be of significant value to us. With eight confirmed discoveries from our Egypt and Morocco drilling campaigns and one well still to be tested, reduced G&A expenses and a successful disposal, we have allocated capital with success and discipline in the period,” he added.
In terms of the financial results, the Egypt and Morocco-focused oil and gas firm confirmed 97% production growth versus the same period in the preceding year – with entitlement production amounting to 6,980 barrels of oil equivalent per day (boepd).
Production growth was driven by output from the South Disouq field, which continued to perform ahead of expectations. It contributed some 4,825 boepd net to SDX.
Two wells were drilled at South Disouq, meanwhile, and plans are underway to connect those new wells into production facilities. SDX is also working to ‘high grade’ more South Disouq prospects and targets for drilling.
First half 2020 revenue was reported at US$22mln, up from US$15.5mln at the same stage in 2019, while underlying earnings (EBITDAX) totalled US$15.3mln versus US$9.3mln in H1 2019.
The company reported a comprehensive loss of US$4mln after US$4.5mln of non-cash write-offs, US$12mln of depletion, depreciation and amortisation and US$19.4mln of capital expenditure.
SDX said it generated US$10mln of cash from operations and ended June 2020 with US$9.3mln. The company noted that it is fully funded for all planned activities in 2020.
“We enter the second half of 2020 in a very strong position with minimal upcoming capital commitments, a strong balance sheet, and a portfolio of fixed and high price gas assets which will generate significant free cash flow,” Reid added.
“We will continue to implement our strategy for the remainder of the year, focusing on ways that we can further grow the business, both organically and inorganically, in the best interests of all stakeholders."