FIRST QUARTER 2016 FINANCIAL AND OPERATING RESULTS

SDX ENERGY INC

FIRST QUARTER 2016 FINANCIAL AND OPERATING RESULTS

London, England - May 26, 2016, SDX Energy Inc. ("SDX" or the "Company") (TSXV, AIM: SDX) announces its 2016 First Quarter Financial and Operating Results (the "Quarter" or "Q1 2016").

First Quarter 2016 Highlights:

Corporate and Financial

·     3 months to March 31, 2016 realized net revenues of US$2.1 million ("MM") and netback of US$1.1MM (2015: US$2.8MM and US$2.1MM, respectively);

·     3 months to March 31, 2016 realized average oil price of US$24.46 per barrel ("bbl") (2015:US$37.57/bbl);

·     3 months to March 31, 2016 net cash from operating activities of US$1.8MM (2015:US$1.9MM)

·     As at March 31, 2016 cash on hand of US$8.7MM and zero debt;

·     Invested US$5.8MM of capital expenditure into business;

·     3 months to March 31, 2016, total comprehensive (loss) of US$(0.9)MM (2015: total comprehensive income US$0.8MM).

Operational Highlights

·     3 months to March 31, 2016 average daily oil sales of 1,252 barrels of oil per day ("BOP/D")  and average daily natural gas and natural gas liquids production of 151 barrels of oil equivalent per day (to be invoiced in Q3 2016);

·     In North West Gemsa, drilled two successful development wells; Al Amir SE-23, which was completed and tested at 3,860 BOP/D with 2.55 MMSCFD in February 2016,  and Al Amir SE-24, which was completed and tested at 1,714 BOP/D with 3.06 MMSCFD in May 2016;

·     Completed planning for 11 well workover program, infill drilling and a waterflood program at Meseda;

·     Commenced 300Km² 3D seismic acquisition in South Disouq with completion targeted for late Q2 2016. Processing and interpretation will follow with a well to be drilled in Q4 2016;

·     The Manatee-1 well in Cameroon was spud on March 2, 2016 and on March 27, 2016 reached a target depth of 1,447 meters after intersecting 26 meters of gas bearing section. Well results currently being assessed and decision on optimum way forward expected soon; and

·     Completed technical review of prospectivity at South Ramadan development concession and commenced discussions with partners on forward plan.

Subsequent to period end:

·     Completed successful US$11MM Placing (before expenses ) and obtained dual listing on the AIM market operated by London Stock Exchange plc ("AIM"); and

·     In Meseda, commenced well workover program and planning for infill drilling and waterflood program which aims to double production in the concession.

2016 Guidance and Outlook:

·     Carry out nine well workover program at North West Gemsa;

·     Initiate an 11 well workover program plus an infill drilling and waterflood program at Meseda;

·     Complete South Disouq 300km² 3D seismic survey and drill carried exploration well before year end;

·     Assess result of Manatee-1 well in Cameroon and technical review at South Ramadan to decide on optimum way forward for these assets; and

·     Continue to work to manage costs post business combination.

Paul Welch, President & CEO of SDX Energy, commented:

"The first three months of 2016 has been challenging for the whole oil industry with Brent oil prices falling as low as $27 per barrel in January.  Fortunately for SDX Energy, we have a particularly robust business underpinned by high-margin production that enables us to generate positive free cash flow down to $15 oil.  Having successfully raised new funds, as part of our dual listing on AIM, we are now well placed to carry out an active work program on Meseda that should result in a material increase in our net production.  Concurrently, we continue to progress our exciting exploration asset at South Disouq and look forward to completing the ongoing 3D seismic survey ahead of a carried well later this year.  Our stable financial position and active work program ensures we are well placed to thrive in a lower for longer oil price environment."

To access the full Q1 2016 Interim Report MD&A, please click here: 
http://www.rns-pdf.londonstockexchange.com/rns/4311Z_-2016-5-26.pdf

To access the full Q1 2016 Interim Report Financial Statements and notes, please click here: 
http://www.rns-pdf.londonstockexchange.com/rns/4311Z_1-2016-5-26.pdf

KEY FINANCIAL & OPERATING HIGHLIGHTS

Unaudited Interim Financial Statements

Proforma Combined Business

Unaudited interim consolidated financial statements with Management's Discussion and Analysis for Q1 2016 are now available on the Company's website at www.sdxenergy.com and on SEDAR at www.sedar.com.

About SDX

SDX is an international oil and gas exploration, production and development company, headquartered in London, England, UK, with a principal focus on Egypt. In Egypt, SDX has an interest in two production concessions: North West Gemsa and West Gharib (Meseda) both located in the Eastern Desert. SDX's portfolio also consists of South Ramadan, a development asset in the Gulf of Suez; South Disouq, an exploration asset in the Nile Delta; and Bakassi West, an exploration block in Cameroon within the prolific Niger Delta Basin. For further information, please see the website of the Company at www.sdxenergy.com or the Company's filed documents at www.sedar.com.

For further information:

Advisory

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking statements" 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 statements. In particular, statements concerning and the completion of and anticipated results from the workover programmes at Meseda and North West Gemsa; the exploration plans for the Company's asset at South Disouq, including the completion of a 3D seismic survey; and the expected results of the business combination between the Company and Madison PetroGas Ltd., which was completed on October 1, 2015, should be viewed as forward-looking statements.

The forward-looking statements contained in this document are 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 statements 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; the sufficiency of budgeted capital expenditures in carrying out planned activities; and the availability and cost of labour and services.

By their very nature, forward-looking statements are 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; failure to realize the anticipated benefits of the Transaction and to successfully integrate the Parties; 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 reference SDX's Annual Information Form for the year ended December 31, 2015 for a description of additional risks and uncertainties associated with SDX's business, including its exploration activities, which can be found on SDX's SEDAR profile at www.sedar.com.

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