SDX Energy PLC (LON:SDX) released financial results for the 12 months ended December 31 2020, a period which saw the company grow despite the challenges and disruptions caused by the pandemic.
“I am extremely pleased to announce a set of results featuring record production, a strong balance sheet and successful drilling results,” said chief executive Mark Reid.
“Operationally, 2020 was a strong year for the group and although the COVID-19 pandemic contributed to a low oil price environment, SDX's high fixed-price gas assets in both Egypt and Morocco demonstrated the cash-generative resilience that exists within our portfolio.”
The company highlighted that it added reserves through exploration and its largest discovery to date, in the SD-12X well, was brought into production before the end of the year – meanwhile divestment of non-core assets boosted cash.
In the year, entitlement production improved 57% to average 6,397 barrels oil equivalent per day (boepd), driven by the South Disouq asset (which contributed some 4,532 boepd).
Production volumes from core assets either beat or were at the top end of guidance, SDX highlighted.
Revenue for the year amounted to US$46.1mln, up from US$34.8mln, despite the volatile market conditions in the broader market.
The company reported earnings (EBITDAX) of US$32.9mln, up from US$23.6mln in the prior year, whilst it marked a US$1.8mln profit from continuing operations compared to a US$0.4mln loss in 2019.
It ended December with US$10.1mln of cash and equivalents.
“With a 39% increase in EBITDAX from continuing operations to US$32.9 million, our strong focus on capital discipline and our balance sheet stewardship, we have ended the year with a healthy cash balance and clarity over our work programme for the next two years, funded from our cash position,” Reid added.
Looking to the current year, SDX set production guidance at 5,620 to 5,920 boepd and pitched its capex expectations at US$25-US$26.5mln.
Reid, meanwhile, highlighted that the forward work programme includes a transformational prospect in the Hanut exploration well which has the potential to significantly increase reserves.
He also noted the recent approval of a 10-year extension for the West Gharib oil operation which gave the company greater access to reserves and, given the project’s US$20 per barrel breakeven threshold, is an “extremely positive development” at current oil prices.
“We have also made excellent progress with various ESG initiatives and I am particularly proud to announce that our carbon intensity in 2020 was only 1.8kgCO2e/boe for our operated assets, one of the best performances in the industry,” Reid said.
“The outlook for SDX is extremely bright and we look forward to delivering on our goals for the coming period and enhancing value for all stakeholders in the company."