SDX Sees Strong Production Growth Despite Industry Downturn

Monday, October 5, 2020

SDX Energy reported that its average entitlement production for the past nine months of between 6,488-6,598 boe/d, an increase of 85-89% from same period in 2019 and exceeding current guidance of 6,000-6,250 boe/d, in an unaudited update of its activities in Egypt and Morocco through Sep 30.

Mark Reid, CEO of SDX, commented: “We have continued to perform strongly in the second half of 2020 despite challenging global conditions. Production is ahead of guidance; we have a healthy cash and liquidity position; and we now plan to accelerate an exciting and potentially transformational drilling campaign in South Disouq into Q2/Q3 2021.

“In addition, as a result of the recent LMS-2 well in Morocco, and further work interpreting existing 3D seismic data, we are very encouraged by a new prospective horizon that we have identified and which we believe is present throughout our acreage.

“Gas consumption from our Moroccan customers is now back to around 90% of pre-COVID-19 restriction levels and we go into the final quarter of 2020 with momentum, exciting and new prospectivity and strong cash generation.”

Highlights include:

South Disouq two-well drilling campaign completed during the period, with the second well, SD-12X (100%W.I.), being a commercial discovery in the Kafr el Sheikh (“KES”) Formation, and management estimating 24 bcf of recoverable resources. Work is underway to connect SD-12X to the Company’s gas processing plant via a 5.8km flow line to the Ibn Yunus-1X well location with production start-up expected in Q1 2021. Based upon well-test data, it is anticipated that when connected the well will produce at a stabilized rate of 10-12 MMscf/d.
Following the success of SD-12X at South Disouq and further review of the 3D seismic, management has now high-graded c.233bcf of mean unrisked recoverable volumes, which are; close to our existing infrastructure, located in horizons that are either productive in South Disouq or in adjacent blocks and which have now been high-graded to ready-to-drill prospects. This increase of 137bcf from the Company’s previous estimates of c.96bcf is primarily attributable to the identification of the Hanut prospect which Company the estimates has an unrisked mean recoverable volumes of 139bcf.
Subject to receipt of final Ministerial and Parliamentary approval of the two-year extension to the South Disouq exploration area, which has already been approved by EGAS, the Company plans to accelerate its drilling campaign to Q2/Q3 2021 from late 2021/early 2022. The campaign will commence with the drilling of the two commitment wells proposed for the extension which will target c.165bcf in the Hanut and Mohsen prospects. The Company’s 45% partner has still to confirm whether they will participate in the proposed extension.

For the complete release, click here.

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SDX Sees Strong Production Growth Despite Industry Downturn

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SDX Sees Strong Production Growth Despite Industry Downturn

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