SDX Energy PLC on Wednesday said it entered a non-binding heads of terms agreement to divest of all its Egyptian assets, as it prepares to diversify into supporting Morocco’s energy transition.

SDX shares surged up 10% to 4.00 pence on Wednesday in London.

The London-based energy company, which currently has a portfolio of exploration, development and production assets in Egypt and Morocco, said the unnamed prospective buyer is a ‘large multinational operator’ with existing interests in Egypt.

SDX expects to complete the transaction by the end of 2023. However, it said the deal will require shareholder approval, as the consideration ‘will significantly exceed’ the market cap consideration test threshold and the disposal would ‘constitute a fundamental change of business’ under AIM regulations.

SDX said the disposal will leave it well-positioned for its planned diversification into Morocco’s energy transition sector.

Managing Director Daniel Gould said the transaction ‘will be a significant milestone on the company’s transition roadmap that we will soon be presenting to our shareholders’.

‘SDX, re-energised with new management, will focus on monetising exciting opportunities around its Moroccan assets and related energy transition sector-plays in order to reward and deliver capital growth to our shareholders in the near term.’

SDX cautioned that there is no guarantee that the transaction will close, as completion is subject to milestones like obtaining approvals from the Egyptian government.

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