Petroleum Africa
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Tuesday, July 14, 2020
SDX Energy announced that it has disposed of its 50% working interest in the North West Gemsa license, situated in the Eastern Desert of Egypt. The purchaser, Gulf Energy, a private Egyptian oil and gas company, has paid $3.0 million in consideration for the company’s interest, of which $1.4 million has been used to discharge the company’s remaining liabilities on the license.
The net $1.6 million proceeds exceeds management’s expectations for the sale of this non-core asset. The disposal is part of SDX’s ongoing focus and commitment to capital discipline and careful management of the Group’s portfolio while also providing additional cash to further strengthen its balance sheet.
Mark Reid, CEO of SDX, commented: “We are pleased to complete the sale of our interest in the North West Gemsa license. Whilst we have presented our interest in the license as non-core for some time, owing to its reducing production and marginal netbacks, it is a welcome outcome to be exiting the license with a useful cash consideration and also avoiding the upcoming associated budgeted capex of approximately $2.0 million for the year. This deal demonstrates our continued focus on portfolio and capital management, and we look forward to recycling the cash into projects that will further enhance and grow our business in the future.”
The NW Gemsa Concession is an 83 sq km onshore concession located approx. 300 km southeast of Cairo in the Eastern Desert adjacent to the Gulf of Suez. The concession consists of three main oilfields Al Amir SE, Al Ola and Geyad fields producing light 42-degree API Oil. NW Gemsa is a late-life asset with increasing water cut and declining production.
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