SDX Energy Plc (LON:SDX) reported a 9% rise in first-half production following successful drilling at the Meseda field and increased gas sales in Morocco.
Production rose to 3,539 barrels of oil per day (boe/d) in the six months to the end of June from 3,234 boe/d a year ago.
Revenue rose 4% to US$25mln as higher production offset a decline in prices to US$57 per boe from US$62 boe last year.
Following the drilling of the Rabul-7 development well at Meseda in the Gulf of Suez, the MSD-19 well was spud in early August.
Production guidance maintained
SDX maintained its gross production guidance of 4,000-4,200 barrels per day from the field.
In Morocco, gas sales rose to 745 boe/d in the first half from 660 boe/d the previous year, putting SDX on course to meet its 2019 sales guidance of average gross rate of 6.0-6.5mln standard cubic feet per day.
The group said planning for the drilling of 12 wells in Morocco is at an “advanced stage” with the campaign expected to begin in the fourth quarter, completing in the first half of 2020.
In Egypt, first gas from the South Disouq project is expected in the fourth quarter after the construction of a central processing facility completes. The installation and hook-up of the facility is scheduled to begin later this month.
“Achieving first gas at South Disouq in Q4 will be transformative for the Company, as we will benefit from our 55% share of the expected production plateau of 50 MMscfe/d from Q1 2020,” said Mark Reid, interim chief executive of SDX.
Solid cash position
As of June 30, the company had cash of US$11mln with its US$10mln loan facility undrawn. SDX said all its drilling and development activities are fully funded from expected future cash flows and its existing sources of liquidity.
"The company continues to make good progress toward achieving its three medium-term strategic objectives of securing first gas at South Disouq in Q4 2019, executing an efficient and successful 12-well drilling campaign in Morocco in 2019/20, and continuing with our potential exploration drilling campaign in South Disouq in 2020,” Reid said.
“Production and capex from our operations remains within our guided ranges and we look forward to updating the market on the results of our drilling activities in Meseda and Morocco in the coming months.
“Our cashflow generation, liquidity position, and balance sheet remain strong and continue to provide us with the necessary funding to complete all of these medium-term strategic objectives.”