FULL YEAR 2022 FINANCIAL AND OPERATING RESULTS
SDX Energy Plc (AIM: SDX), reports its audited financial and operating results for the twelve months ended 31 December 2022. All monetary values are expressed in United States dollars net to the Company unless otherwise stated.
The Annual Report & Accounts of the Group for the year ended 31 December 2022 is now available on the Company's website and on Sedar.
Full year 2022 key results:
· Net Production, 3,723 boe/d (507 bbls/d and 19.3mmscf/d), marginally ahead of mid-point full year guidance of 3,480 - 3,795 boe/d.
· EBITDAX of US$24.6 million and operating cash flow (before capex) of US$16.9 million.
· Out of 14 wells completed across SDX's portfolio in the year to date, twelve were put on production during 2022.
· Capex US$27.6 million compared to revised full year guidance of US$26.5 - 28.0 million.
· Net Cash of US$4.9 million as at 31 December 2022.
· As at 31 December 2022, the Company's working interest share of audited 2P reserves was 4.9 MMboe.
Jay Bhattacherjee, Interim Executive Chairman of SDX, commented:
"2022 was a busy year for the Company operationally and corporately. During the summer of 2022 the shareholders rejected a takeover attempt and the Company welcomed new shareholders to support the Company's growth. Additionally, during the period there was significant personnel change at both a Board and Executive Management level and I joined the company as the non-Executive Chairman at the end of October and assumed the role as Interim Executive Chairman in December. SDX enters 2023 with a renewed focus on delivering long term sustainable returns to shareholders by pursuing opportunities both within and outside our current portfolio across the wider energy space.
In Egypt, the planned three well drilling campaign was completed during the year, as well as a necessary workover programme on several existing wells. While our Egyptian assets continue to produce, at present Egypt is a challenging operating environment for energy companies with sharp devaluation in the value of the currency, which has impacted the dollar value of the cash we hold there, and severe limitations on our ability to transfer funds out of the country due to capital controls. These are both outside our control. Historically our producing Egyptian assets have funded the Company's growth initiatives and we are having to find other solutions, and minimising the risk associated with this has been a key focus in recent months. This is a dynamic situation and we will provide further updates in due course.
In Morocco, SDX drilled two new wells which were put into production during the year and the Company is currently maximising recovery from our existing wells to maintain customer supply. It is our intention to have an expanded drilling programme later in 2023 to continue to meet existing demand and to produce to meet any increase or additional customer demand. Morocco remains a core piece of the portfolio and as the country's only gas producer, we maintain an opportunity to grow into a market that is hungry for every molecule of gas we can produce.
While the Company faces a number of challenges, the changes made in 2022 and the ongoing modifications we make as part of our strategic review are positioning SDX with a foundation from which to grow. We are revaluating our standing in the wider energy sector and will consider all reasonable avenues, including transition fuels and alternative energies, to deliver long term sustainable returns to shareholders. The Company has great strengths, and I'm confident that we can rise to and overcome the challenges faced and return to growth, and I thank all shareholders and colleagues for their support during 2022."
Twelve months to 31 December 2022 Operations Highlights
· Entitlement production for the twelve months ended 31 December 2022 of 3,723 boe/d was marginally ahead of 2022 mid-point guidance of 3,638 boe/d, driven by strong performances in Morocco and at South Disouq, with West Gharib's production lower than expected due to drilling delays and higher water and sand production from some wells drilled on the flanks of the Meseda field.
· In South Disouq, the planned three-well drilling campaign has been successfully completed. The SD-5X and SD-12_East discoveries have been brought online ahead of schedule, delivering production and revenues. The MA-1X gas discovery well has been evaluated post year-end and the Company will progress with developing the area after it has finalised the area's commercialisation strategy.
· In West Gharib, eight wells have been successfully completed and are on production. One exploration well was a dry-hole and is waiting on a workover to convert it to a water-injector for the Rabul Field. Eighteen well workovers across the concession were completed during 2022.
· In Morocco, both wells (SAK-1 and KSR-20) in the two-well drilling campaign discovered gas and have been tied into the Company infrastructure and were contributing to production at the end of 2022. During the year, several workovers were performed to access behind-pipe reserves.
· As at 31 December 2022, the Company's working interest share of audited 2P reserves was 4.9 MMboe. The Company's 2P reserves and 2C resources estimates have been audited in accordance with the COGE Handbook & PRMS by Gaffney, Cline & Associates, an independent qualified reserves evaluator and auditor.
· The Company's operated assets recorded a carbon intensity of 3.6kg CO2e/boe
Twelve months to 31 December 2022 Corporate Highlights
· During the year a number of Board changes were announced. The Board is now led by Jay Bhattacherjee as Executive Chairmen, with his fellow directors being Tim Linacre and Krzysztof Zielicki.
· New shareholders were introduced to the register and have provided a clear mandate to the Board for growth.