Shares of SDX Energy have experienced a rise following the announcement that the company has received a gas prepayment of $1.9 million from Citic Group subsidiary, Citic Dicastal. As of 0740 GMT, shares are up 0.5 pence, or 13%, reaching 4.25 pence.
The North Africa focused oil-and-gas company confirmed on Thursday that these funds will primarily be allocated towards covering the expenses associated with drilling the KSR-21 well in Morocco.
Expressing enthusiasm over this development, SDX Energy stated, "This prepayment serves as evidence of the deepening partnership between SDX and Citic Dicastal. Furthermore, it demonstrates Citic Dicastal's status as the largest offtaker for SDX, with a growing and immediate demand for our gas."
Earlier this year, on September 13th, the company had disclosed its agreement on gas prepayment heads of terms with Citic Dicastal's wholly-owned subsidiary, Dika Morocco Africa, for gas supplies in the fourth quarter. In addition, SDX Energy revealed that negotiations were underway for further heads of terms pertaining to a larger prepayment amount. It is anticipated that these terms will be agreed to and the funds will be drawn by early 2024, subsequently supporting a comprehensive multi-well back-to-back drilling program.