SDX Returns to Operational Stability in N Africa

North Africa-focused SDX Energy reported March 19 a net loss of $2.1mn for 2020, an improvement on 2019's loss of $18.2mn. It saw a 40% jump in full-year pre-tax (Ebitdax) earnings, reporting Ebitda at $32.9mn net of exploration costs, compared with $23.6mn in 2019.

The netback from its sales more than halved, from $34.7/barrel of oil equivalent (boe) to $16.7/boe, although its Moroccan gas business saw a rise, from $10.39/'000 ft³ to $10.80/'000 ft³, demonstrating the "cash-generative resilience that exists within our portfolio," it said. In Egypt, its South Disouq gas price was $2.85/'000 ft³ in both years. It sold two minor assets in Egypt for the better-than-expected sum of $2.1mn.

Production in Morocco fluctuated following the introduction of lock-down measures but now it is back as high as before and is projected to be 8%-12% higher this year than last.

It said it has also made excellent progress with various environment, social and governance (ESG) and its carbon intensity in 2020 at its operated assets was one of the lowest, at 1.8 kgCO2e/boe.

Its average entitlement production of 6,397 boe/d was up 57%, thanks mainly to South Disouq. Overall its 2020 production from core assets either exceeded or was at the top end of market guidance. Capex was below guidance, primarily due to drilling at West Gharib being deferred owing to the lower oil price environment in 2020. The guidance for production this year is 5,620-5,920 boe/d with capex at $25.0mn-$26.5mn.

Subject to Egyptian ministerial approval, SDX plans to drill the Hanut prospect targeting 139bn ft³ in Q3 2021. It will be part of a two-well campaign with IY-2X well, a development well in the eastern part of the Ibn Yunus field, seeking to bring forward production and cash flow. 

And in Morocco, subject to a successful flow test of LMS-2, SDX plans to target the Top Nappe as part of its drilling campaign in the first half of this year.

CEO Mark Reid said 2020 was a strong year operationally and its high fixed-price gas assets in both Egypt and Morocco demonstrated the cash-generative resilience. Its largest discovery, the SD-12X well in South Disouq was brought on stream before the end of the year.