SDX Energy, the North Africa –focused oil and gas company reported a 2017 profit of US$28.3 million as it benefited from high margins at newly acquired Moroccan business and higher oil prices, while it announced plans to drill new wells.
It reported a net income of $28.3 million for the twelve months ending Dec. 31, swinging from a $28.2 million loss in the year-earlier period.
The company made net revenues of $39.2 million in 2017, up from $12.9 million a year ago.
SDX Energy said a main component of the net income was a $29.6 million gain on acquisition of the Egyptian and Moroccan businesses of Circle Oil.
“The acquisition of Circle Oil’s assets, enabling us to substantially increase production, and cash flow, over the course of the year,” said Paul Welch, president and CEO of SDX Energy.
“We continued to see strong operational performance throughout the year across our portfolio.”
At the end of 2017, the company’s working interest share of audited 2P reserves (proved and probable reserves) was 13.5 millions of barrels of oil equivalent – representing a 45 per cent increase on the combined 2P reserves of the company and the Egyptian and Moroccan businesses of Circle Oil at the end of 2016, SDX Energy said.
In Egypt’s Meseda, it successfully drilled two exploration wells in 2017 followed by the successful Rabul-5 appraisal well earlier this month.
Welch said the remainder of 2018 will see a second appraisal well, Rabul-4, followed by two development wells on the Meseda area of the concession.
Meanwhile, its nine-well drilling programme in Morocco has seen five discoveries from seven wells drilled to date. The company will tie-in of the most recent discovery, SAH-2 and the push ahead with the drilling of two exploration wells: LNB-1, which commenced drilling operations on March 20, 2018 and LMS-1 which will be drilled early in the second quarter of 2018.
SDX is targeting 2018 gross production in Morocco of 8-10 million standard cubic feet per day of conventional natural gas by the end of 2018, depending on timing of tie-ins.
Additionally, SDX plans to shoot 240km2 of 3D seismic in its Rharb Centre concession at an
estimated cost of US$6.5 million
“As a company, we continue to focus on low cost, high margin production, thereby creating further value for our shareholders. Our strong funding position means we are well placed to capitalise on any suitable, value enhancing asset opportunities that may arise going forward,” Welch added.