London-based Oil and gas explorer SDX Energy has bought Circle Oil’s subsidiaries in Egypt and Morocco for about $30 million.
The acquisitions are expected to increase working production by 247% to about 4,705 barrel of oil equivalent per day and its net working interest 2P reserves will grow by 64% to 12.03m barrels of oil equivalent.
The company funded the acquisitions by raising about $40m (32.1 million) from a placing of 107.05 million shares at 30p each, which were admitted to trade on AIM on Friday. An application has also been made for the shares to trade on the TSX Venture Exchange in Canada. The shares represent 57.28% of the company’s total issued share capital.
The company has bought a 40% stake in the NW Gemsa concession in Egypt, adding to the 10% stake it already owned, and this will add net working interest production of approximately 2,600 barrels of oil equivalent per day and net working interest in 2P reserves of 3.8m barrels of oil equivalent to the SDX portfolio.
In Morocco, the company has bought a 75% stake in both the Sebou and Lalla Mimouna concessions, which will add net working interest production of approximately 750 barrels of oil equivalent and net working interest in 2P reserves of about 0.9m barrels of oil equivalent to its portfolio.
In addition, the company has acquired a positive net working capital position of about $18.3 million, comprising about $16.4 million in receivables less payables and about $1.9 million in cash.
About $14.5 million has been allocated for use in Egypt and about $3.8 million in Morocco.
Paul Welch, president and chief executive, said: “This announcement marks an important milestone in SDX’s corporate history. The successful fundraise and acquisition will enable us to substantially increase our production, and cash flow, over the course of 2017 and beyond as we seek to build a mid-tier E&P focused on North Africa. We remain excited about our upcoming drilling campaign in South Disouq.”
Source: ShareCast News