The Company is pleased to announce that it has entered into a non-binding HoT with DMA, its largest offtaker, to prepay for SDX’s gas deliveries in Morocco. The initial terms of the agreement envisage draw down of c. $2 million by the end of September 2023. These funds are planned to be used towards the drilling costs of the KSR-21 well.
A further heads of terms for a larger prepayment amount is currently under negotiation and is expected to be agreed and funds drawn by early 2024. The Company plans to direct this second prepayment towards funding a further multi-well back-to-back drilling programme. As mentioned in the Company’s announcement of 4 September 2023, this type of back-to-back drilling, which allows development of gas behind pipe (booked reserves), further increases operational efficiency, reduces costs and ensures that immediate and future demand can be met.
The Company also announces that it has drawn down a further $500k from the Convertible Loan, as announced on 27 July 2023.
Daniel Gould, the Managing Director, commented:
“These Heads of Terms testify to the deepening of the long-standing partnership between SDX and DMA, as well as Citic Dicastal more broadly. SDX has been supplying gas to DMA in Morocco for over five years and is committed to continuing to be a sustainable partner for its energy needs. This partnership is mutually beneficial for SDX, DMA, and supports the growth of industry in Morocco.”
· DMA is a 100% subsidiary of Citic Dicastal – world leader in automobile part manufacturing and the 50th largest auto supplier in the world.
· Citic Dicastal is a subsidiary of Citic Group – a Chinese holding company with a corporate portfolio approaching $1 trillion.