SDX Energy Plc has announced a binding sale and purchase agreement (SPA) for disposing its West Gharib interests in Egypt.
The company is making steady progress finalizing the legal documents for the sale of its South Disouq assets in Egypt. This sale aligns with the company’s strategy to fully exit the Egyptian market and focus its efforts on maximizing shareholder value.
“The West Gharib assets subject to the SPA comprise (a) 50% of the issued share capital of Brentford Oil Tools LLC, (b) 50% interest in the Exploration and Production Sharing Agreement relating to Sub-Area (A) West Gharib Blocks G, H (including the receivables), and (c) 50% interest in the Joint Operating Agreement relating to the West Gharib Blocks (together the “Assets”). For the year ended 31 December 2023, the unaudited profits attributable to the Assets amounted to $0.9 million,” the company revealed.
The total amount of sale proceeds to be received from the buyers, New Horizons LLC and NPC Petroleum Services Ltd (together the “Purchasers”), is estimated at US$6.6 million (subject to certain working capital and other adjustments).
SDX expects to deposit the EGP30 million into escrow immediately using existing EGP cash. The remaining EGP70 million is expected to be deposited by September 2024 using cash generated from Egyptian gas sales. Funds held in escrow will be used to cover potential Egyptian tax liabilities, with any excess being returned to the Company once the tax liability has been settled.
“The sale of our West Gharib assets represents a milestone in the execution of our new growth strategy in Morocco. SDX will continue to deliver shareholder value and growth – re-energizing and scaling the Company’s Moroccan upstream business. We will also continue to carry out due diligence for SDX’s medium-term expansion into the vertical adjacencies of gas transportation, gas-to-power, and renewable energy generation,” SDX CEO, Daniel Gould, commented.
