REG - SDX Energy PLC - Corporate Update

SDX EnergyAnnouncement

09/01/2024 08:15

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RNS Number : 0148Z  SDX Energy PLC  09 January 2024

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY SDX TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION
(EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

9 January 2024

 

SDX ENERGY PLC ("SDX" or the "Company")

CORPORATE UPDATE

Highlights

·   Gas prepayment agreement rolled over with CITIC Dicastal subsidiary,
DIKA MOROCCO AFRICA ("DMA"), for a further $2.1 million for Q1 2024 gas
deliveries.

·    The Company continues to work with CITIC Dicastal on a long-term
prepayment for future gas deliveries in Morocco.

·    Latest well, KSR-21, is tied-in and ready to supply SDX's offtakers.

·   Egyptian West Gharib asset sale documentation agreed with execution and
closing expected later in January, subject only to administrative steps being
completed.

·    Implementation of new strategy, including detailed cost review and
balance sheet optimisation by swapping $1 million of cash-backed bank
guarantee with a parent company guarantee.

 

Morocco - SDX/CITIC strengthen partnership

 

The Company is pleased to announce that it has reached agreement for a second
3-month gas prepayment with its largest offtaker in Morocco on the same terms
as the previously announced, Q4 2023 prepayment. The prepayment by DMA covers
the supply of gas by SDX for the first quarter of 2024 and is approximately
$2.1 million.

 

Additionally, the Company continues to work directly with CITIC Dicastal to
provide a long-term offtake agreement, demonstrating the support of CITIC
Dicastal, a company with nearly $1 trillion in assets.

 

Morocco - KSR-21 well update

 

The KSR-21 well, which was successfully drilled and tested in Q4 2023, has now
been tied into existing infrastructure and will begin producing as soon as the
expected government approvals are received, which are envisaged shortly. The
Company will update shareholders as soon as production from this well has
commenced.

 

 

Egypt - sale update

 

SDX is pleased to confirm that it has agreed with the buyer the terms of an
execution version of the sale and purchase agreement ("SPA") for its West
Gharib assets.

 

The closing of the transaction remains subject to the completion of certain
approvals, including Egyptian government approvals, which are not expected to
be withheld, with the execution of the SPA and the final closing date for the
sale of these assets is now expected in the second half of January 2024.

 

Proceeds from the sale of the West Gharib assets are expected to be
approximately $6.9 million and will be paid in US dollars. Of the total West
Gharib sale proceeds, approximately $3.8 million will be paid immediately.
The remaining $3.1 million, which is subject to certain post close events, is
expected to be paid during Q1 of 2024.

 

In parallel, the Company is finalising the SPA for the divestment of its
remaining Egyptian asset, South Disouq, with terms largely agreed. This sale
of this SDX-operated asset is also subject to government and joint venture
partner approvals.

 

Corporate update and replacement of bank guarantee

 

The Company continues to work on delivering on its recently announced new
strategy. The proceeds from the sale of the Company's Egyptian assets and of
payments in Morocco will be used to develop its existing assets in Morocco and
pay creditors.

 

Additionally, the Company continues to evaluate areas to improve operational
and commercial efficiencies and to reduce costs where possible with the aim of
delivering long-term sustainable returns for shareholders. This includes
prudent balance sheet optimisation and, to that end, the Company has recently
replaced a $1.0 million cash-backed bank guarantee with a parent company
guarantee ("PCG").

 

It is expected that this change in guarantee structure will enable SDX to
access $1.0 million of cash by the end of February 2024.

 

Both the previous cash-backed bank guarantee and the new PCG cover SDX's Lalla
Mimouna Nord concession obligations to ONHYM.

 

For further information:

 

 SDX Energy Plc

 Daniel Gould, Chief Executive Officer

 William McAvock, Chief Financial Officer

 Tel: +44 (0) 20 3219 5640

 Shore Capital (Nominated Adviser and Broker)

 Toby Gibbs/Iain Sexton

 Tel: +44 (0) 20 7408 4090

 InHouseIR (Investor and Media Relations)

 Sarah Dees/Oliver Clark

 Email: sdx@inhouseir.com

 Tel: +44 (0) 78 8165 0813 / +44 (0) 20 3239 1669

 

About SDX

For further information, please see the Company's website at
www.sdxenergygroup.com
(https://url.avanan.click/v2/___http:/www.sdxenergygroup.com/___.YXAxZTpzaG9yZWNhcDphOm86MDEzNTAyODI2ZTNhZWY5ZWM4YWU4MGY3MmNiNjhiMDc6Njo4MDY2OmIyZDJhNDdjNTNhNWU3Yjc5Y2VjZDQ5MzgxZTRkZWJlNTE2NjQyYTMwOTk0NmQwOGZjN2U4MWIyMzIxODExNjM6cDpU)
or the Company's filed documents at www.sedar.com
(https://url.avanan.click/v2/___http:/www.sedar.com/___.YXAxZTpzaG9yZWNhcDphOm86MDEzNTAyODI2ZTNhZWY5ZWM4YWU4MGY3MmNiNjhiMDc6NjplNWE4OjE1YTQ5NzZmMjEyMWQ5MjgyZjhkZjI1YmQzNmU3YzE3ODdlMWMyY2MwM2E4YjBiYTJmY2M3ODk2ZWE5MmI3YTM6cDpU)
.

 

Forward-looking information

Certain statements contained in this press release may constitute
"forward-looking information" as such term is used in applicable Canadian
securities laws. Any statements that express or involve discussions with
respect to predictions, expectations, beliefs, plans, projections, objectives,
assumptions or future events or are not statements of historical fact should
be viewed as forward-looking information. In particular, statements regarding
the sales of assets and future gas production at KSR-21 should be regarded as
forward-looking information.

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