British oil and gas company SDX Energy announced on Wednesday that it had entered into a non-binding agreement with Dika Morocco Africa (DMA), its largest purchaser, to prepay for fiscal year Q4 gas supplies in Morocco.
According to the press release, the basic conditions of the agreement call for a $2 million withdrawal of funds by the end of September 2023. The funds will be used to cover the costs of drilling the KSR-21 Well in Oued Sebou, near the Gharb Basin in Morocco.
A further set of arrangements for a larger prepayment is currently being negotiated and is expected to be agreed upon by early 2024. SDX intends to use it to support another multi-well back-to-back drilling campaign.
The company’s Managing Director Daniel Gould said earlier that this back-to-back program would reduce costs per well, increase operational efficiency, and attempt to collect sufficient reserves of ‘gas-behind-pipe’ to meet both existing and future demand.
SDX Energy also reported that it had drawn down $500k from the Convertible Loan, which was disclosed on July 27, 2023.
“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.” commented Gould.
DMA is a subsidiary of Citic Dicastal, an automobile parts manufacturer, and the 50th largest auto supplier in the world. Citic Dicastal itself is a subsidiary of Citic Group, a Chinese holding company with a corporate portfolio of almost $1 trillion.