SDX Energy PLC (LON:SDX) highlighted a strong period of production and cash generation as it reported results for the first three quarters of 2020.
The company stated an average entitlement production rate of 6,646 barrels oil equivalent per day (boepd) for the period, representing a 90% gain on the comparative nine months in 2019.
Production growth was driven by the South Disouq asset which, after coming online in late 2019, became established during the period producing some 48.6mln cubic feet of gas and 467 barrels of oil per day, equating to 4,710 boepd net to SDX.
"I am pleased to report another strong period of production and cash generation from our portfolio in what remains a challenging period for businesses globally,” said Mark Reid, SDX CEO in the results statement.
“Despite this, we reiterate our production guidance for 2020 and feel that we are in a very strong position to continue our excellent cash generation with approximately 90% of revenues being derived from our fixed price gas contracts.”
SDX retains full-year production guidance at 6,000 to 6,250 boepd across all assets, which would mark a 48%-54% improvement on the prior year.
Net revenue for the nine months ended September 30, 2020, amounted to US$33.8mln, up from US$23.7mln in the same period last year. Earnings (EBITDAX) was reported at US$23.9mln, up from US$15.1mln.
The company stated a loss of US$2.2mln, whilst net cash generation from operating activities totalled US$14.7mln.
At of September 30, SDX had US$9.9mln of cash and equivalents.
SDX said its annual capex spend would be in-line with guidance of US$26.2mln and noted that the majority of the spending had already been incurred.
A two-well programme was completed during the period, and the company delivered a new South Disouq discovery - contributing 24bn cubic feet to gas resources and teeing up further production at the project. Construction work meanwhile continues to connect the well to nearby infrastructure and bring the additional gas online in the first quarter of 2021.
Looking ahead, the company is now preparing to accelerate a drill campaign previously slated for 2022 forward to mid-2021.