SDX suffers $24m loss on Egyptian impairments
SDX Energy said March 18 it had suffered a total comprehensive loss of $24mn in the 2021 calendar year as it was forced to write off costs at failed projects in Egypt and Morocco, and after a $2mn loss in 2020.
The company is selling off 33% of its wholly-owned South Disouq gas project for $5.5mn. In August, it failed to strike oil or gas at an exploration probe targeting the concession's Hanut prospect. SDX Energy is retaining 66% to continue generating revenue while reducing risk exposure on another two exploratory probes due to be drilled this year.
The National Gas Company of Trinidad and Tobago Limited (NGC) NGC’s HSSE strategy is reflective and supportive of the organisational vision to become a leader in the global energy business.
Failure at Hanut led to a $1.3mn write-down at SDX's Egyptian subsidiary. A further $9.5mn non-cash impairment, comprised of property, plant and equipment, was booked on the South Disouq cash generating unit, after a downward revision in the recoverable reserves held in SDX's producing fields. The 2022 production guidance for South Disouq has been slashed to 2,280 barrels of oil equivalent/day to reflect the divestment, planned maintenance at the asset and well workovers.
Recoverable reserves was also downgraded at the SD-12X borehole. SD-12X had launched in December 2021, when SDX reported it would host 24bn ft3 of recoverable resources and ramp up to 10 to 12mn/ft3 production, from an initial flow rate of 5 to 7mn ft3.
In Morocco, SDX said there were three "commercial successes" at its operated Gharb Basin acreage: at the OYF-3, KSR-17 and KSR-18 wells. Development will fire up a second phase comprising two appraisal and development wells in the second quarter. SDX owns a 75% stake in the Gharb Basin licence, a prolific basin that yields 99% dry gas and has produced output since the 1940s. There was a $10.3mn non-cash charge ahead of SDX relinquishing the Lalla Mimouna Nord concession in Morocco.