THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY SDX TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"), THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

30 September 2024

SDX ENERGY PLC ("SDX" or the "Company")

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2024

SDX Energy plc announces its unaudited interim results for the six months ended 30 June 2024.

The Consolidated Financial Statements of the Group for the six months ended 30 June 2024, containing full financial statements that comply with IFRS, is now available on the Company's website.

Chairman's Review

The first half of 2024 saw SDX continue to build on its strategy to be a best-in-class energy producer. With the sale of the Company's West Gharib assets in Egypt, the continuation of our trade-based financing and (post-period end) the re-negotiation of the convertible loan, we have taken large steps in turning the prospects of the business around.

The focus during 1H 2024 was predominantly the sale of the West Gharib assets, which represented a milestone in the execution of SDX's growth strategy in Morocco, where the Company is the sole independent gas producer. The Executive team and board of directors are focused on delivering long term sustainable value for shareholders.

Finance

In April 2024, SDX received the first instalment of the West Gharib sales proceeds and repaid in full the outstanding secured EBRD reserves-based lending facility amounting to $2.7 million.

The Company's syndicated unsecured convertible loan agreement with Aleph Finance Ltd (the "Lender") was amended in April 2024 to extend the draw down period. This granted the Company access to further gross funding of $0.75 million, which was drawn down in April 2024 to pay service providers in relation to Moroccan drilling activities and general corporate expenses. Post-period end, in September 2024, the Lender and the Company agreed to amend the terms of the existing convertible loan (the "Amended Facility Agreement").

Under the terms of the Amended Facility Agreement, the Lender will provide a term loan facility in the amount of up to $6,500,000, such total amount to be confirmed by the Lender (the "Loan"), to the Company to be repaid by 23 July 2025. Following repayment of the existing convertible loan, the Company intends to draw on approximately $2.0 million of the remaining balance of the Loan. Following the repayment of existing financial indebtedness owed by the Company to the Lender under the existing convertible loan and other agreements, the Company will apply the balance of the monies borrowed under the Amended Facility Agreement towards capital expenditure in Morocco and general corporate creditors. The Loan will be secured against the Company's shares in SDX Energy Morocco (Jersey) Ltd and Sea Dragon Energy (Nile) B.V. and a debenture over the Company, including assignment of intercompany loans and security over HSBC bank accounts in England and various receivables. On 14 October 2024, the Company plans to convene a general meeting to ask shareholders to vote on the Amended Facility Agreement (the "General Meeting"). The completion of the Amended Facility Agreement is conditional upon the Company's shareholders voting in favour of the resolutions at the General Meeting.

Additionally, CITIC Dicastal subsidiary, DIKA MOROCCO AFRICA ("DMA"), continued to prepay each quarter for gas deliveries during Q1, Q2 and Q3 in Morocco.

Operations

During the first half of 2024, in Morocco, the Company produced approximately 407 million cubic feet (68,000 barrels of oil equivalent), averaging 2.3 MMscf/d (1H 2023: 581 million cubic feet averaging 3.2 MMscf/d).

In January 2024, we tied-in the Ksiri-21 ("KSR-21") well in Sebou Central of the Gharb Basin, Morocco and, in April 2024, we received the necessary approvals to commence production of gas. In April 2024, we also commenced drilling the Beni Malek-2 well ("BMK-2") in the Rharb Basin, Morocco, approximately 1.5 km from the BMK-1 discovery well. In May 2024, we completed operations at BMK-2, encountering a 9-metre interval that demonstrated strong gas shows of up to approximately 100 times background gas readings. The well has been left temporarily suspended with a plug set to allow the well to be sidetracked.

Despite challenging capital market conditions and the Board's focus on completing complex transactions, SDX has successfully delivered on the aims of its drilling campaign, with a new well, KSR-21, entering production at the beginning of the year and a new well at BMK-2. The Company is making solid progress towards its goal of transitioning into a hybrid energy producer and infrastructure operator, providing gas to a region with an urgent need to fuel its continued growth.

The Atlantic Free Zone and Kenitra industrial region are of strategic importance not only for SDX, but also for Morocco's long-term growth plans. As the sole independent gas producer in Morocco, and the operator of local pipeline infrastructure, the Board believes SDX is uniquely positioned to power a region that has experienced double-digit growth year-on-year and a commensurate increase in energy demand. We continue to work closely with our partners in the region, including CITIC Dicastal's Moroccan subsidiary, part of a trillion-dollar global group.

To conclude, we thank our shareholders and all our stakeholders for their continued support over this period of transformation and transition for the Company. We maintain our promise to work diligently and energetically to revitalise SDX and leverage the unique position in which the Company finds itself to create significant, sustainable value for our shareholders.

Jay Bhattacherjee

Non-Executive Chairman

27 September 2024

Review of operations

MOROCCO

The Company's Moroccan acreage (where SDX has a 75% working interest and is operator) consists of three petroleum agreements in the Rharb Basin in northern Morocco: Sebou Central, Rharb Occidental and Lalla Mimouna Sud.

The Sebou Central petroleum agreement is a 105 km² exploration permit with several exploitation concessions contained within it. The exploitation concessions that remain active under the Sebou and Sebou Central petroleum agreement are:

•     Ksiri Central, expiry January 2025

•     Sidi Al Harati Ouest, expiry October 2024

•     Sidi Al Harati Nord, expiry September 2025

•     Gaddari Nord, expiry October 2025

•     Oulad N'Zala Central, expiry May 2025

•     Ksiri Ouest, expiry October 2026

In September 2021, according to the regulations governing petroleum agreements, SDX relinquished 25% of the original Sebou Central acreage and entered into a 2.5 year extension period of the exploration permit. In March 2024, SDX relinquished an additional 10% of the permit area and entered into a Second Extension Period of 1.5 years with expiry in September 2025.

The Rharb Occidental petroleum agreement is an 806 km² exploration permit with numerous prospects and leads already identified on the existing 3D seismic. The exploitation concessions that remain active under the Rharb Occidental petroleum agreement are:

•     Beni Malek Sud-Est, expiry January 2026

•     Oulad Youssef Central, expiry August 2025

•     Gueddari Sud Ouest, expiry December 2024

•     Sidi Al Harati Sud, expiry December 2024

The Company has held the Lalla Mimouna Sud permit since February 2019. A one year force majeure extension to the "Initial Period" of 2.5 years was granted by the Ministry of Energy, which expired in September 2022. SDX has entered into the "First Extension Period" of 2.5 years, expiring in March 2025. The Lalla Mimouna Sud concession is now a 629.9 km² permit.

All of the Petroleum Agreements remain valid until expiration of the last exploitation concession granted under the relevant Petroleum Agreement.

The Company was awarded the Moulay Bouchta Ouest exploration permit in February 2019 for a total period of eight years. A one-year force majeure extension to the "Initial Period" of the permit was granted by the Ministry of Energy, which expired in September 2023. An extension of 6 months to this period was granted by the Ministry of Energy, which expired in March 2024. We have not sought a further extension and therefore the concession is in process of being relinquished.

1H 2024 Activity

Testing and completion was concluded on the new BMK-1 well in January 2024, combined with the successful connection of the ONHYM pipeline, which connects this well and the surrounding area to our existing infrastructure. BMK-1 commenced production in late January 2024.

By late April 2024, KSR-21 commenced production and the BMK-2 well had been drilled to its total depth of 1,412 metres. BMK-2 has been left temporarily suspended with a plug set to allow the well to be sidetracked, to the target formation at 1,265 metres, once the required equipment has been mobilised. No workovers were conducted in 1H 2024.

For the six months period ended 30 June 2024, Morocco gross production was approximately 407 million cubic feet (68,000 barrels of oil equivalent), averaging 2.3 MMscf/d (1H 2023: 581 million cubic feet averaging 3.2 MMscf/d).

2H 2024 Outlook

 SDX has identified two new drilling locations and is in the final stages of securing land permits for each. The newly processed seismic data has been integrated into the original interpretations, further de-risking both prospects, designated as KSR-22 and OLME-A. SDX plans to commence its next drilling campaign during Q4 2024. Gas from these wells will supply our existing customers to serve their expanding needs.

We are currently in discussion with ONHYM in relation to agreeing future permit requirements, which include undertaking new 3D seismic work either in late 2024 or early 2025.

SDX is preparing a tender process to select a partner for the acquisition of over 150 km² of 3D seismic data. The area selected for this new seismic acquisition campaign is to the north-west of the existing newly merged seismic surveys and has been strategically placed to allow SDX to tie-in to its existing pipeline infrastructure, merge into the newly merged data set while covering a thicker and prospective portion of the basin. SDX anticipates finalising the tender and commencing the seismic acquisition in Q1 2025. The EIA for this project commenced in July and is expected to be completed during Q4 2024.

EGYPT (HELD FOR SALE)

South Disouq

South Disouq is a 115 km² concession located 65 km north of Cairo in the Nile Delta region. It is on trend with several other prolific gas fields in the Abu Madi Formation.

Development leases have been granted for South Disouq (18 km²), Ibn Yunus (24 km²), and Ibn Yunus North (32 km²), and all development leases are operated by SDX. Production is currently from the Messinian-aged Abu Madi and Pliocene-aged Kafr El Sheikh formations. In addition, SDX operates the Amendment Concession Agreement Area, which is an exploration permit of 41 km².

At the beginning of 2022, SDX held a 55% interest in the South Disouq and Ibn Yunus development leases and a 100% interest in the Ibn Yunus North development lease. Its partner, IPR, holds a 45% interest in the South Disouq and Ibn Yunus development leases. In February 2022, it was announced that SDX sold 33% of the shares in the entity that holds its interests across its South Disouq concession to Energy Flow Global ("EFG"), a private company with upstream and oilfield services activities in Egypt, the Middle East and Asia. In February 2023, SDX re-acquired these shares in exchange for a 33% direct share of the leases. After this transaction, SDX Energy still has an effective 36.9% working interest in the South Disouq and Ibn Yunus development leases and a 67.0% working interest in the Ibn Yunus North development lease.

1H 2024 Activity

Analysis of the exploration MA-1X well on Mohsen has been completed and the Company is evaluating next steps.

West Gharib

West Gharib is 22 km² in area and is producing from the Meseda and Rabul fields, both of which are included in the Block-H development lease. The concession is covered by a production service agreement, which allows for lower cost operations than the traditional joint venture structure. SDX had a 50% working interest in the operation, with Dublin International Petroleum, the operator, holding the remaining 50% working interest.

The Meseda field produces 18^o API oil from the high-quality Miocene-aged Asl sands of the Rudeis formation. The Rabul field produces 16^o API oil from the Miocene-aged Yusr and Bakr sands, which are also part of the Rudeis formation.

In 2021, a 10-year extension for both Meseda and Rabul was agreed with GPC, extending the licence to 9 November 2031. As part of the agreement, the contractors have a minimum commitment to drill six infill development wells (four in Meseda and two in Rabul) and one water-injection well in Rabul by 31 December 2022, and up to another six wells across the concession depending on the prevailing oil price. To take advantage of low drilling costs and the current oil price environment, however, the partnership planned to drill 13 infill development wells from 2022 onwards.

1H 2024 Activity

The infill campaign has continued in 2024.

Workovers of the existing wells have continued in 2024 to maximise production and recovery from the Meseda and Rabul Fields.

2024 Outlook (EGYPT)

Due to issues in relation to currency controls and ongoing devaluations of the Egyptian Pound, it was determined during 2023 that it would be better to focus our resources on our Morocco operations. Therefore, offers for our interests in South Disouq and West Gharib were entertained, and by 31 December 2023 we had entered into advanced negotiations on both assets.

On 19 April 2024, the sale of our interest in West Gharib had been finalised, and we continue to evaluate options to maximise shareholder value for South Disouq, including a sale of the asset or potentially developing it. As part of the West Gharib sale, our investment in Brentford Oil Tools has also been sold. All revenues and costs in relation to these operations have been treated as discontinuing activities in the accounts for the six months period ended 30 June 2024 - the Balance Sheet impact is that the relevant Group Assets and Group liabilities have been reclassified as being Held for Sale.

Environmental, Social and Governance ("ESG")

1H 2024 ESG METRICS

• The Company's operated assets recorded a carbon intensity of 8.8kg CO₂e/boe in 1H 2024 (1H 2023: 4.5kg CO₂e/boe).

• Scope 1 greenhouse gas emissions from all operated assets were 4,800 tons of CO₂e (1H 2023: 5,400 tons of CO₂e). Scope 3 greenhouse gas emissions in Morocco were 24,800 tons of CO₂e (1H 2023: 30,100 tons of CO₂e), which is approximately 11,300 tons of CO₂e (1H 2023: 13,800 tons of CO₂e) less than using alternative heavy fuel oil.

• There were no Lost Time Injuries at any of the Company's assets during 1H 2024 (1H 2023: none).

• No produced water was discharged into the environment in Morocco or at South Disouq (100% processed or evaporated).

• There were no hydrocarbon spills at operated assets (1H 2023: nil).

• The Company continues to adopt high standards of Governance through its adherence to the QCA Code on Corporate Governance.

Financial Review

Discontinued activities

As at 31 December 2023, the Group had committed itself to the sale of its Egyptian operations. This has translated into the completion of the sale of its 50% holding in Brentford Oil Tools and its interest in the West Gharib concession on 19 April 2024 and a commitment to sell its interest in the South Disouq concession later in 2024 or 2025.

In effect, this renders the Group's entire Egyptian operations as discontinued as at 30 June 2024, and requires their results to be treated as such in the Consolidated Statement of Comprehensive Income and the Consolidated Statement of Cash Flows for the period ending 30 June 2024 and related comparatives under IFRS 5 "Disposal of subsidiaries, business and non-current assets".

Further details, including the results of these discontinued operations, can be found in note 23 to the Consolidated Financial Statements.

Operational and Financial Highlights

Unless specified, all matters discussed going forward in this Financial Review will refer to the Group's continuing operations (in Morocco) only. In accordance with industry practice, production volumes and revenues are reported on a Group interest basis, before the deduction of royalties.

Morocco gas sales revenue

The Group currently sells natural gas to seven industrial customers in Kenitra, northern Morocco.

Morocco gas sales variance from prior year

For the six months ending 30 June 2024 (compared to the six months ending 30 June 2023), the decrease in Morocco gas sales revenue of $0.1 million was mainly as a result of a $1.6 million decrease in production due to our producing wells getting older in general despite new wells (BMK-1 and KSR-21) commencing production during the period. The group is seeking to accelerate the number of wells being brought into production in 2024. This was partially offset by a favourable price variance of $1.5 million, which was caused by increases in gas prices and increased sales to higher-priced contracts.

Royalties

In Morocco, sales-based royalties become payable when certain inception-to-date production thresholds are reached, according to the terms of each exploitation concession. Royalties were a net credit of $0.5 million in the six months ending 30 June 2024 due to a reassessment of the historic liability, which was also impacted by favourable foreign exchange rate movements during the period.

Direct operating costs

Direct operating costs for the six months ending 30 June 2024 were $0.5 million, compared to $1.2 million for the comparative period.

The direct operating costs for concessions that are continued operations were:

The direct operating costs per unit for concessions that are continued operations were:

Morocco

Operational expenditure in Morocco is less dependent on production than in many other hydrocarbon-producing countries, as much Moroccan operational expenditure is fixed in nature, e.g. headcount and compressor/separator rentals, and might be impacted by expenditure that is one-off in nature.

Direct operating costs for the six months ended 30 June 2024 were $0.7 million lower compared to the comparative period due to newer wells (requiring less maintenance) entering into production during the current period. This has caused the direct operating costs per boe to decrease by 37% to $10.63/boe for the six months ended 30 June 2024 (in comparison to $16.88/boe for the comparative period).

General and administrative expenses

Ongoing general and administrative ("G&A") costs for the six months ended 30 June 2024 were $0.2 million lower compared to the comparative period mainly due to a reduction in employee-related expenditure primarily due to significantly reduced headcount in the corporate part of the business, partially offset by a lower G&A recharge much of which is due to these savings and other operational efficiencies across the group.

Transaction costs increased by $0.1 million compared to the comparative period mainly due to professional services associated with the sale in 19 April 2024 of the Group's working interest in West Gharib being incurred from from late 2023 onwards.

Capital expenditures

The following table shows the capital expenditure for the Group overall. It agrees with notes 7, 8 and 23 to the Consolidated Financial Statements for the period ended 30 June 2024, which include discussion therein.

The Group has future capital commitments associated with its oil and gas assets, details of which can be found in note 20 to the Consolidated Financial Statements

Exploration and evaluation expense

For the six months ended 30 June 2024, exploration and evaluation expenses stood at $4.4 million, compared to $0.1 million in the comparative period.

The current period expense relates mainly to:

·      $4.5 million non-cash write off of exploration expenditure incurred in continuing activities (Morocco) predominantly relating to the BMK-2 well, representing the total of their book value exceeding their recoverable amount.

·      $0.1 million credit related to refunded overpayments for business evaluation activities and reductions in provisions for obsolete drilling inventory in Morocco.

The prior period expense relates mainly to:

·      $0.1 million incurred for new business evaluation activities in Morocco.

Depletion, depreciation and amortisation                       

For the six months ended 30 June 2024, depletion, depreciation, and amortisation ("DD&A") amounted to $1.2 million, compared to the $2.6 million in the comparative period, a reduction of $1.4 million.

The DD&A movement is primarily due to a $1.4 million decrease in DD&A for Morocco mainly due to lower production as a proportion of reserves in comparison to the comparative period, which is a consequence of lower production in the current period and an upward revision in reserves at 31 December 2023.

Foreign exchange loss

The $0.3 million foreign exchange loss during the year is due to losses arising from the strengthening of the Moroccan Dirham ($0.4 million) partially offset by gains on currency conversion ($0.1 million).

Impairment expense

At the reporting date, management performed an impairment indicator assessment of the Morocco Rharb Basin Cash Generating Unit ("CGU"), and concluded that property, plant and equipment ("PP&E") drilling costs of $5.0 million in relation to the '2021 drilling campaign' as at 30 June 2024 should be tested for impairment. As a result, it determined that a $5.0 million impairment needed to be recognised within 'impairment expense' within the Consolidated Statement of Comprehensive Income. Please see note 7 to the Consolidated Financial Statements for further details.

No such impairment of PP&E assets occurred in the comparative period.

Sources and uses of cash

The Group's net cash position as at 30 June 2024 was $1.4 million, with cash balances of $5.2 million offset by $3.3 million drawn debt and $0.5 million accrued interest from the convertible loan.

The following table sets out the Group's sources and uses of cash for the six months ended 30 June 2024 and 30 June 2023:

Going concern

Accounting standards in the UK require the directors to assess the Group's ability to continue to operate as a going concern for the foreseeable future, which covers a period of at least 12 months from the date of approval of the Consolidated Financial Statements.

The directors reviewed the cash flow projections prepared by management for the period ending 31 December 2025. The capital expenditure and operating costs used in these forecasted cash flows are based on the board's best estimate.

The principal assumptions underlying the cash flow forecast and the availability of finance to the Group are as follows:

·      The Group expects to be able to meet its licence commitments in Morocco and Egypt. This includes drilling several wells in Morocco to ensure continued gas supply to offtakers. The Group may need to negotiate with the Moroccan and Egyptian authorities to revise work programmes or licence commitments. Based on previous successful renegotiations of licence commitments, the directors believe that this is likely to be achieved, but it is not guaranteed.

·      An offtaker prepays for gas to be supplied in Morocco during 2H 2024 (amounting to approximately $2.0 million).

·      The Moroccan state confirms the release of a cash-backed guarantee, which would enable $0.4 million of restricted cash held as security to become unrestricted, due to the Company having completed the land reclamation work on three wells on a licence in Morocco that has been relinquished.

·      The Group sells its remaining asset in Egypt (South Disouq) - for sales proceeds of at least $3.0 million.

·      The Group agrees a farm-in deal over its assets in Morocco whereby a joint venture partner pays a contribution towards past costs and funds future capital expenditure in order to earn an interest in the assets.

·      The Group will continue to negotiate and reach agreements with creditors to spread the payment of liabilities over time.

·      The Group will continue to make payments to creditors in line with agreed payment plans.

·      At the General Meeting to be held on 14 October 2024, shareholders will vote for the resolutions, which is a condition of the existing convertible loan being renewed until July 2025 and not becoming immediately repayable.

·      The holders of the Loan will exercise their right to convert the amount owed into Ordinary Shares in the Company instead of the Loan amount being repaid in cash when it matures in 2025.

In reviewing the cash flow forecast and the principal assumptions above, the Directors have also considered other alternative measures available to the Group, including the deferral of planned expenditure, the reduction of overhead costs and an alternative method of raising capital or debt. These alterative measures give the Directors a reasonable expectation that the Group will have sufficient funds to enable it to discharge its liabilities when they fall due.

However there exists a material uncertainty that may cast significant doubt over the ability of the Group to continue as a going concern. The Board believes it has options to raise external capital, but cannot guarantee the amount and timing of any proposed financing. The Board would also note that there are no guarantees that current discussions with the potential buyers of the South Disouq asset in Egypt and potential farm-in partners in Morocco will be favourably concluded and that arrangement with creditors will remain negotiable.

Notwithstanding the material uncertainty identified, the Directors have concluded that the Group will have sufficient resources to continue as a going concern for the period of assessment, that is for a period of not less than 12 months from the date of approval of the consolidated financial statements. Accordingly, the consolidated financial statements have been prepared in a going concern basis and do not reflect any adjustments that would be necessary if this basis were inappropriate.

Non-IFRS measures

The Financial Review contains the terms "Netback" and "EBITDAX", which are not recognised measures under IFRS. The Group uses these measures to help evaluate its performance. Please see note 18 to the Consolidated Financial Statements for a reconciliation of these non-IFRS measures to Operating loss, which is an IFRS recognised measure.

Netback

Netback is a non-IFRS measure that represents sales net of all operating expenses and government royalties. Management believes netback to be a useful supplemental measure to analyse operating performance and provide an indication of the results generated by the Group's principal business activities prior to the consideration of other income and expenses. Management considers Netback an important measure because it demonstrates the Group's profitability relative to current commodity prices. Netback may not be comparable to similar measures other companies use.

EBITDAX

EBITDAX is a non-IFRS measure that represents earnings before interest, tax, depreciation, amortisation, exploration expense, and impairment, which is operating income/(loss) adjusted for the add-back of depreciation and amortisation, exploration expense, and impairment of property, plant, and equipment (if applicable). EBITDAX is presented so that users of the financial statements can understand the cash profitability of the Group, excluding the impact of costs attributable to exploration activity, which tend to be one-off in nature, and the non-cash costs relating to depreciation, amortisation, and impairments. EBITDAX may not be comparable to similar measures other companies use.

Jay Bhattacherjee

Non-Executive Chairman

27 September 2024

Consolidated Balance Sheet as at 30 June 2024

Consolidated Statement of Comprehensive Income for the six months ended 30 June 2024

Consolidated Statement of Changes in Equity for the six months ended 30 June 2024

Consolidated Statement of Cash Flows for the six months ended 30 June 2024

For further information:

About SDX

For further information, please see the Company's website at www.sdxenergygroup.com or the Company's filed documents at www.sedar.com.

Glossary

Forward-looking information

Certain statements contained in this press release may constitute "forward-looking information" as such term is used in applicable Canadian securities laws. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or are not statements of historical fact should be viewed as forward-looking information. In particular, statements regarding: liquidity and sources of cash flows, future drilling developments, costs and results; future raising of external capital and management's beliefs with respect to the Company's overall economic position should all be regarded as forward-looking information.

The forward-looking information contained in this document is based on certain assumptions, and although management considers these assumptions to be reasonable based on information currently available to them, undue reliance should not be placed on the forward-looking information because SDX can give no assurances that they may prove to be correct. This includes, but is not limited to, assumptions related to, among other things, commodity prices and interest and foreign exchange rates; planned synergies, capital efficiencies and cost-savings; applicable tax laws; future production rates; receipt of necessary permits; the sufficiency of budgeted capital expenditures in carrying out planned activities, and the availability and cost of labour and services.

All timing given in this announcement, unless stated otherwise, is indicative, and while the Company endeavours to provide accurate timing to the market, it cautions that, due to the nature of its operations and reliance on third parties, this is subject to change, often at little or no notice. If there is a delay or change to any of the timings indicated in this announcement, the Company shall update the market without delay.

Forward-looking information is subject to certain risks and uncertainties (both general and specific) that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward-looking statements. Such risks and other factors include, but are not limited to, political, social, and other risks inherent in daily operations for the Company, risks associated with the industries in which the Company operates, such as: operational risks; delays or changes in plans with respect to growth projects or capital expenditures; costs and expenses; health, safety and environmental risks; commodity price, interest rate and exchange rate fluctuations; environmental risks; competition; permitting risks; the ability to access sufficient capital from internal and external sources; and changes in legislation, including but not limited to tax laws and environmental regulations. Readers are cautioned that the foregoing list of risk factors is not exhaustive and are advised to refer to the Principal Risks & Uncertainties section of SDX's Annual Report for the year ended 31 December 2023, which can be found on SDX's website and its SEDAR profile at www.sedar.com, for a description of additional risks and uncertainties associated with SDX's business.

The forward-looking information contained in this press release is as of the date hereof and SDX does not undertake any obligation to update publicly or to revise any of the included forward‐looking information, except as required by applicable law. The forward‐looking information contained herein is expressly qualified by this cautionary statement.

Non-IFRS Measures

This news release contains the terms "Netback," and "EBITDAX" which are not recognised measures under IFRS and may not be comparable to similar measures presented by other issuers. The Company uses these measures to help evaluate its performance.

Netback is a non-IFRS measure that represents sales net of all operating expenses and government royalties. Management believes that Netback is a useful supplemental measure to analyse operating performance and provide an indication of the results generated by the Company's principal business activities prior to the consideration of other income and expenses. Management considers Netback an important measure as it demonstrates the Company's profitability relative to current commodity prices. Netback may not be comparable to similar measures used by other companies.

EBITDAX is a non-IFRS measure that represents earnings before interest, tax, depreciation, amortisation, exploration expense and impairment. EBITDAX is calculated by taking operating income/(loss) and adjusting for the add-back of depreciation and amortisation, exploration expense and impairment of property, plant, and equipment (if applicable).  EBITDAX is presented in order for the users to understand the cash profitability of the Company, which excludes the impact of costs attributable to exploration activity, which tend to be one-off in nature, and the non-cash costs relating to depreciation, amortization and impairments. EBITDAX may not be comparable to similar measures used by other companies. 

Oil and Gas Advisory

Certain disclosures in this news release constitute "anticipated results" for the purposes of National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101") of the Canadian Securities Administrators because the disclosure in question may, in the opinion of a reasonable person, indicate the potential value or quantities of resources in respect of the Company's resources or a portion of its resources. Without limitation, the anticipated results disclosed in this news release include estimates of volume, flow rate, production rates, porosity, and pay thickness attributable to the resources of the Company. Such estimates have been prepared by Company management and have not been prepared or reviewed by an independent qualified reserves evaluator or auditor. Anticipated results are subject to certain risks and uncertainties, including those described above and various geological, technical, operational, engineering, commercial, and technical risks. In addition, the geotechnical analysis and engineering to be conducted in respect of such resources is not complete. Such risks and uncertainties may cause the anticipated results disclosed herein to be inaccurate. Actual results may vary, perhaps materially.

Use of the term "boe" or the term "MMscf" may be misleading, particularly if used in isolation. A "boe" conversion ratio of 6 Mcf: 1 bbl and a "Mcf" conversion ratio of 1 bbl: 6 Mcf are based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Use of a Standard

Reserve and resource estimates disclosed or referenced herein have been prepared in accordance with the SPE's Canadian Oil and Gas Evaluation Handbook and in accordance with NI 51-101.