SDX Energy Plc Sets out 2021 Plan in Egypt and Morocco

Tuesday, January 26, 2021

SDX Energy Plc has sets out its production and capex guidance for 2021 for its operations in Egypt and Morocco. Its 2021 capex guidance range of $25.0 – 26.5 million predominantly relates to one exploration and one development well in Egypt’s South Disouq together with workovers and the installation of an inlet compressor. Up to five new wells and workovers are planned in Morocco and up to four new wells and facilities upgrades at West Gharib.

Highlights of the work program follow:

South Disouq: One development well, Ibn Yunus-2X, and one exploration well, Hanut-1X, will be drilled consecutively, commencing in Q2 2021. The IY-2X well will access the western compartment of the Ibn Yunus field and is expected to be completed and tied back rapidly once drilled. The Hanut-1X well is targeting unrisked mean recoverable volumes of 139bcf with a 33% chance of success. The Company’s partner has confirmed that it will participate in both wells. An inlet compressor will be installed at the CPF site to maximise recovery from the fields, and several well workovers are also planned. Once the exploration concession extension that includes the Hanut and Mohsen prospects has been ratified by Parliament, the Company will pay its share of signature and training bonuses.
West Gharib: At least three infill development wells will be drilled with a fourth contingent upon field performance and the macroeconomic environment. One water injection well will be drilled, and additional facilities to support this project will be installed. Given the recent low oil price environment, only one development well was drilled in 2020.
Morocco: Four or five wells will be drilled in two campaigns in Q2 and Q4 2021. As the drilling rig is stacked in the Company’s yard in Morocco, there will be no significant mobilization cost and in addition splitting the campaign into two allocates the capital investment over approximately eight months which allows the cost of these wells to be comfortably covered by cash generated in that period. Four wells will target shallow biogenic gas that can be tied into the Company’s infrastructure quickly and at low cost. Furthermore, one of these wells will be deepened to test the Top Nappe prospectivity in the Company’s core production area. If the first Top Nappe test is successful, then a second well may also be deepened. On the assumption that the rig continues to be available after the drilling of the four firm wells, a fifth contingent well would target an additional prospect in the BMK area, which was derisked by the BMK-1 well in 2020. A workover program of up to nine wells will also be conducted, including re-perforation and sliding sleeve operations to exploit behind-pipe reserves and maximize production and recovery from the existing well stock.

Mark Reid, CEO of SDX, commented: “I am pleased to provide our production and capex guidance for 2021, where after a very solid year of production in 2020, we continue on a similar profile, albeit with some contingency worked in for maintenance in Egypt. Partially offsetting this, I am very pleased to report that Moroccan production has returned to the levels seen before last year’s COVID-19 close down. This year’s expected operating cashflows, together with our existing cash of approximately $10 million, will provide ample liquidity to carry out a busy drilling campaign of nine to eleven wells targeting exploration and development opportunities in Egypt and Morocco, including the potentially transformational gross 139 Bcf Hanut-1X well in South Disouq in Egypt and the testing of our newly discovered Top Nappe play in Morocco. Furthermore, we expect that our EBRD credit facility will soon return to $10 million of availability and thus provide us with additional liquidity if required.”

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Petroleum Africa

SDX Energy Plc Sets out 2021 Plan in Egypt and Morocco

Petroleum Africa On-The-Go

SDX Energy Plc Sets out 2021 Plan in Egypt and Morocco

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