H1 2020 Results Highlights 1 20 August 2020 “Supplying energy in an environmentally conscious manner to the benefit of all our stakeholders” SDX ENERGY WWW.SDXENERGY.COM
2 Contents Business environment and outlook 3 H1 2020 operational highlights 5 H1 2020 financial highlights 6 H1 2020 production 7 South Disouq drilling 8 Morocco drilling 13 2020 CAPEX guidance 14 2020-22 Activities and Value Catalysts 15 Valuation & share price performance 16 Summary 17 Appendix: • H1 2020 financial results 19 SDX ENERGY WWW.SDXENERGY.COM
Business Environment and Outlook 3 Resilience in challenging environment with material exploration prospectivity recently identified Sound defensive qualities with downside protection against oil prices: • Fixed-price gas-weighted portfolio with minimal linkage to oil price • Approximately 90% of the Company's cash flows are expected to be generated from fixed-price gas businesses in 2020 and 2021 at Brent oil price of $35/bbl Strong liquidity position and entering a period of lower capex activity: • US$9.3 million of cash and US$7.5 million of additional liquidity from the undrawn EBRD credit facility as at 30 June 2020 (unaudited) • Majority of 2020 capex is completed – continued sharp focus on capital discipline and cash generation Focussed on NAV accretive growth and shareholder returns: • Sobhi discovery in period drilled at 100% working interest adding estimated 24Bcf of recoverable resource to be tied in to South Disouq processing plant. • Post Sobhi, a minimum of 100bcf of additional follow on prospectivity already identified across four proven play types (three within concession and one 10km to the east). Further analysis underway with this estimate expected to increase. • c.20 bcf of near term P50 prospective resource de-risked in Morocco • Continued evaluation of inorganic growth opportunities through M&A SDX ENERGY WWW.SDXENERGY.COM
Business Environment and Outlook 4 Resilience in challenging environment Resilience and continuity during COVID-19 : Morocco • T emporary shut in from three customers re-started in early May at partial capacity with c.70% of capacity having returned at 19 August 2020 • Remaining five customers have continued uninterrupted • Moroccan business remains extremely resilient and can breakeven with customer consumption levels at 20% of Q1 2020 levels Egypt • No disruption to production to date • South Disouq gas sold to EGAS for use predominantly in electricity generation • With bulk of capex spent in early part of year, no disruption to remaining programme expected London • London Head Office functions continue to operate using internal HSE protocols facilitating distance working SDX ENERGY WWW.SDXENERGY.COM
H1 2020 Operational Highlights 5 Adding value through the drill bit in Egypt and Morocco • The South Disouq two-well drilling campaign was completed during the period, with the second well, SD-12X (100% working interest to SDX), being a commercial discovery adding an estimated 24 bcf of recoverable resources • Plans underway to connect SD-12X to the Company’s gas processing plant via a 5.8km flow which when connected, will produce at a stabilised estimated rate of 10-12 mmscf/d in Q1 2021 • Following success of SD-12X, management is looking to high grade a number of additional, adjacent and now de-risked, material prospects for drilling in the next two to three years • Moroccan drilling campaign resulted in seven discoveries from nine wells drilled to date, with the tenth well, LMS-2, completed and awaiting crew mobilisation for testing post lifting of COVID-19 travel restrictions • Discoveries at OYF-2 and BMK-1 confirm the prospectivity in SDX’s existing core production and development area extends to the north, and have de-risked c.20 bcf of P50 prospective resources SDX ENERGY WWW.SDXENERGY.COM
H1 2020 Financial Highlights 6 Production growth, robust operating cash flow, capital discipline and good liquidity • Production of 6,980 boe/d up 97% vs H1 2019 as South Disouq performed well • Revenues of US$22.0 million (unaudited) for period with realised Moroccan gas price of US$10.35/mcf and US$2.85/mcf in Egypt (fixed) • Netback of US$17.2 million (unaudited) up 38% vs H1 2019 • H1 2020 EBITDAX of US$15.3 million (unaudited) was 65% higher vs H1 2019 • H1 2020 capex of US$19.4 million (unaudited), reflecting: • US$12.2 million for Moroccan drilling campaign; • US$6.0 million for the drilling of the SD-6X (SDX: 55% interest) and SD- 12X (SDX: 100% interest) • Strong liquidity position (unaudited): • Cash balance of US$9.3 million • Undrawn US$7.5 million EBRD credit facility SDX ENERGY WWW.SDXENERGY.COM
H1 2020 Production 7 Above-guidance performance at South Disouq, temporary COVID impact on Morocco demand Gross production boe/d SDX entitlement production boe/d Guidance - 12 months Asset Actual - 6 months Actual - 6 months Actual 6 months ended ended 31 December ended 30 June 2020 ended 30 June 2020 30 June 2019 2020 Core assets South Disouq – WI 55% 52.6 MMscfe/d 47 – 49 MMscfe/d 4,825 - West Gharib – WI 50% 3,395 bbl/d 3,200 – 3,300 bbl/d 647 822 Morocco – WI 75% 5.7 MMscf/d 5.3 – 6.0 MMscf/d 707 745 Non-core assets N/A – now disposed N/A – now disposed 769 1,972 NW Gemsa – WI 50% South Ramadan – WI 12.75% 251 boe/d - 32 - T otal 6,980 3,539 • South Disouq has performed above expectations during H1 2020, with all four wells producing strongly and the CPF achieving higher than planned levels of uptime • Moroccan production saw a strong start to the year, and although consumption has rebounded from shutdowns that ran from late March to early May, some uncertainty remains, resulting in small reduction in annual guidance to 5.3 – 6.0 MMscf/d (previously 6.7 – 6.9 MMscf/d). • With the sale of NW Gemsa having completed in July, full year 2020 guidance is now 6,000 – 6,250 boe/d. SDX ENERGY WWW.SDXENERGY.COM
South Disouq Drilling 8 H1 2020 South Disouq Drilling & Operations – Significant discovery on flagship asset Discovery at Sobhi well has significantly increased resource Egypt asset map figures at South Disouq and means Group can sustain production for longer at its flagship asset SD-6X (Salah) drilled in March 2020 - sub-economic (SDX: 55% W.I.) • SD-12X (Sobhi) exploration discovery (SDX: 100% W.I.) encountered 108 feet • net of high-quality gas-bearing sands Following extended well test of SD-12X, stabilised production rate is expected • to be 10-12 MMscf/d from Q1 2021 Best estimate c. 24 bcf of recoverable gas resources • Partner has elected not to exercise its back in rights, meaning that SDX will • benefit from 100% of the discovery cash flows Sobhi expected to be tied in during 2020/21 via a 5.8 kilometre connection to • the Ibn Yunus-1X location, cost estimated at US$3.5 million Sobhi development lease application covers additional prospects de-risked by • discovery SDX ENERGY WWW.SDXENERGY.COM
South Disouq Drilling 9 96 bcf of un-risked gas potential identified in 5 prospects Shikabala North Sobhi-Shikabala Development Lease Sobhi FDP submitted to EGAS will also • secure Shikabala and Shikabala North prospects. Mohsen and El Deeb proposed exploration concession extension Approach being made to EGAS / Ministry • Shikabala to extend the exploration period of the South Disouq concession for certain Warda blocks containing additional prospectivity Mohsen is a basal KES prospect and El • Deeb is a Buried Hill prospect, a new play concept in South Disouq The Buried Hill play is not proven in the • South Disouq concession but is proven at Damas South Field, 10km to the east. Primary South Disouq Prospects 1 Class EUR (bcf) CoS El Deeb Warda Prospect 14 50% Mohsen Mohsen Prospect 25 51% El Deeb Prospect 23 29% Shikabala Prospect 22 40% Shikabala N Prospect 12 40% TOTAL 96 (1) SDX Management estimates SDX ENERGY WWW.SDXENERGY.COM
South Disouq Drilling 10 Future exploration potential identified in four proven play types Shallow KES Play Basal KES Amplitude Play Sobhi Ibn Yunus The Shallow Kafr El Sheikh • The Basal Kafr El Sheikh (KES) play (KES) play has been proven by • has been proven by success at the success at the SD-3X (encountering two separate Ibn Yunus (IY-1X) and Sobhi (SD- features, shown above) and SD- 12X) discoveries. 6X wells (not shown in the The play is driven by the amplitude • schematic). response seen on 3D seismic data. So far the volumes discovered • Post the success at Sobhi, four other • have been small but represent low-risk prospects have been useful additions to existing fields identified totalling an estimated that can be exploited as the 73bcf recoverable resource: Mohsen, main reservoirs become Warda, Shikabala and Shikabala depleted. North (SDX Management estimate) SDX ENERGY WWW.SDXENERGY.COM
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