REG - SDX Energy PLC - Sale of West Gharib Asset in Egypt

SDX EnergyAnnouncement

19/04/2024 07:00

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RNS Number : 2317L  SDX Energy PLC  19 April 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.

 

19 April 2024

 

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

SALE OF WEST GHARIB ASSET IN EGYPT

 

SDX is pleased to announce that it has executed a binding sale and purchase
agreement ("SPA") for the disposal of the Company's West Gharib interests in
Egypt. The Company also continues to progress the binding documentation for
the sale of its South Disouq assets. The Company is focused on delivering
shareholder value by focusing its efforts on fully exiting Egypt, growing its
Moroccan assets and executing on the energy transition strategy. The board and
management will be sharing more details on the continued execution of this
wider strategy soon.

The West Gharib assets subject to the SPA comprise (a) 50% of the issued share
capital of Brentford Oil Tools LLC, (b) 50% interest in the Exploration and
Production Sharing Agreement relating to Sub-Area (A) West Gharib Blocks G, H
(including the receivables), and (c) 50% interest in the Joint Operating
Agreement relating to the West Gharib Blocks (together the "Assets"). For the
year ended 31 December 2023, the unaudited profits attributable to the Assets
amounted to $0.9 million. The total amount of sale proceeds to be received
from the buyers, New Horizons LLC and NPC Petroleum Services Ltd (together the
"Purchasers"), is estimated at US$6.6 million (subject to certain working
capital and other adjustments). The Company will receive the following:

(i)            c. $3.5 million in USD cash, payable immediately to
the Company outside of Egypt;

(ii)           c. $0.9 million in USD cash, payable within 5
business days of the deposit by SDX of EGP30 million (c. $0.6 million) into an
escrow account; and

(iii)          c. $2.2 million in USD cash, payable within 5 business
days of the earlier of:

a.   the deposit by SDX of a further EGP70 million (c. $1.4 million) into an
escrow account; and

b.  settlement of any tax liability (if any) in full.

SDX expects to deposit the EGP30 million into escrow immediately using
existing EGP cash. The remaining EGP70 million is expected to be deposited by
September 2024 using cash generated from Egyptian gas sales. Funds held in
escrow will be used to cover potential Egyptian tax liabilities, with any
excess being returned to the Company once the tax liability has been settled.

The sale proceeds will be received outside Egypt and will be primarily used to
continue to expand SDX's cash generative operations in Morocco, where the
Company is the sole independent producer of gas. The Company is leveraging its
position and pipeline infrastructure to increase gas supply and deliver other
energy sources to its customers in Kenitra. SDX will also repay in full the
outstanding secured EBRD reserves-based lending facility.

Daniel Gould, Chief Executive Officer, commented: The sale of our West Gharib
assets represents a milestone in the execution of our new growth strategy in
Morocco. SDX will continue to deliver shareholder value and growth -
re-energising and scaling the Company's Moroccan upstream business. We will
also continue to carry out due diligence for SDX's medium-term expansion into
the vertical adjacencies of gas transportation, gas-to-power, and renewable
energy generation.

 

 

 

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/Harry Davies-Ball

 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

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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.

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