AIM-listed SDX Energy, the MENA-focused oil and gas company, has disposed of its 50% working interest in the North West Gemsa licence, situated in the Eastern Desert of Egypt. The purchaser, Gulf Energy, a private Egyptian oil and gas company, has paid US$3.0 million in consideration for the Company's interest, of which US$1.4 million has been used to discharge the Company's remaining liabilities on the licence.
The net US$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 whilst 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 licence. Whilst we have presented our interest in the licence as non-core for some time, owing to its reducing production and marginal netbacks, it is a welcome outcome to be exiting the licence with a useful cash consideration and also avoiding the upcoming associated budgeted capex of approximately US$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 km2 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.
Source: SDX Energy / energy-pedia