UPDATE ON TESTING OF GAS DISCOVERY AT MA-1X WELL IN THE SOUTH DISOUQ CONCESSION EGYPT
SDX Energy Plc (AIM: SDX), the MENA-focused energy company provides an update on the testing of its gas discovery at the MA-1X well that targeted the Mohsen prospect, within the Exploration Extension Area of South Disouq.
The MA-1X (SDX WI: 67%) discovery, announced on 8 June, is currently in the process of being tested. As expected, the well test showed good flow rates of c. 8.0 MMscf/d commensurate with the high quality Kafr El Sheikh Formation reservoir around the well bore, which has an average porosity of 31.9%. However, the well-head pressure decline observed over a three-day production test was higher than expected, which could indicate that a lower volume of gas is connected to the MA-1X well bore compared to pre-drill estimates. Whilst this does not change the Company’s estimate of overall gas in place in the discovery, it may indicate that there is a change in facies closer than expected to the MA-1X well bore that could be compartmentalising the gas to some extent. The Company is currently undertaking a pressure build up test and will obtain the relevant data from down hole gauges early next week, the results of which will be available in the coming weeks. Additionally, the existing 3D seismic data around the discovery will be reprocessed and re-interpreted. The final results of this work are expected to be available in three months’ time and will inform the requirements to commercialise the discovery, which may necessitate more wells than the two wells initially estimated to produce the gas.
Mark Reid, CEO of SDX, commented:
“The higher-than-expected pressure decline from the MA-1X test is a surprise and inconsistent with what we have seen in our analogous Ibn Yunus wells. We will work closely with our partners over the next three months interpreting the test results and reprocessing and re-interpreting the existing 3D seismic over the discovery. At the end of this process, we will update the market as to the proposed commercialisation strategy for the discovery which may mean that an additional well or wells could be required to produce out this discovery.”
SDX is an international oil and gas exploration, production, and development company, headquartered in London, United Kingdom, with a principal focus on MENA. In Egypt, SDX has a working interest in two producing assets: a 36.9% operated interest in the South Disouq and Ibn Yunus gas fields and a 67.0% operated interest in the Ibn Yunus North gas field in the Nile Delta and a 50% non-operated interest in the West Gharib concession, which is located onshore in the Eastern Desert, adjacent to the Gulf of Suez. In Morocco, SDX has a 75% working interest in four development/production concessions, all situated in the Gharb Basin. The producing assets in Morocco are characterised by attractive gas prices and exceptionally low operating costs. SDX has a strong weighting of fixed price gas assets in its portfolio with low operating costs and attractive margins throughout, providing resilience in a low commodity price environment. SDX’s portfolio also includes high impact exploration opportunities in both Egypt and Morocco.
Estimates of reserves and resources have been prepared in accordance with the June 2018 Society of Petroleum Engineers (“SPE”) Petroleum Resources Management System (“PRMS”) as the standard for classification and reporting with an effective date of 31 December 2021 and in accordance with National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) of the Canadian Securities Administrators.
Competent Persons Statement
In accordance with the guidelines of the AIM Market of the London Stock Exchange, the technical information contained in the announcement has been reviewed and approved by Dr Rob Cook, VP Subsurface of SDX. Dr. Cook has 30 years of oil and gas industry experience and is the qualified person as defined in the London Stock Exchange’s Guidance Note for Mining and Oil and Gas companies. Dr. Cook holds a BSc in Geochemistry and a PhD in Sedimentology from the University of Reading, UK. He is a Chartered Geologist with the Geological Society of London (Geol Soc) and a Certified Professional Geologist (CPG-11983) with the American Institute of Professional Geologists (AIPG).
For further information:
SDX Energy Plc
Chief Executive Officer
Tel: +44 203 219 5640
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