SDX Energy PLC (SDX.L) Successful flow rate test at Sobhi discovery well

Mark Reid, CEO of SDX, commented: We are pleased with these initial well test results which confirms that we have a commercial discovery at the Sobhi well.

This discovery increases our South Disouq 2P reserves by approximately 50% given that we sole risked the well. Furthermore, Sobhi has the potential to extend the current South Disouq plateau production of 50 mmscfe/d through to 2023/24 with a low-cost tie in to our existing gas processing plant. To have a commercial gas discovery of this scale at South Disouq is especially pleasing in the current environment as our low cost, fixed price gas development will continue to be highly cash generative for longer.

Successful flow rate test at Sobhi discovery well in Egypt

SDX Energy Plc (AIM: SDX), the MENA-focused oil and gas company, is pleased to provide an update on well-testing operations at the SD-12X (“Sobhi”; SDX 100% working interest) discovery well in the South Disouq Exploration Permit onshore Nile Delta, Egypt (SDX 55% working interest).

The drill stem test (DST) at the Sobhi well began with a step-rate test of one hour achieving a maximum rate of 25 mmscf/d on a 54/64″ choke. This initial flow test was followed by a three hour period flowing at a stable rate of 15 mmscf/d on a 28/64″ choke and then a further four hours flowing at a stable rate of 10 mmscf/d on a 16/64″ choke. The well was then shut in for a 12 hour build-up period during which pressure continued to increase back to pre-test levels.

From an initial review of the well-test data, it is anticipated that when connected, the well will produce at an optimum stabilised rate of 10-12 mmscf/d which is in line with the nearby Ibn Yunus-1X producing well. The Sobhi well is expected to produce mostly dry gas as opposed to gas and condensate.

Sobhi will be subject to a longer rig-less test in the coming weeks which will provide more data to help determine the recoverable volume in the discovery, which at present management estimates to be 24 bcf of recoverable resource. The exact timing of the rig-less test will be dependent on the timing of the mobilisation of equipment which may be impacted by ongoing Covid-19 restrictions in the region.

Management expect that the Sobhi well will be tied in during 2021 via a 5.8 kilometre tie-in to the Ibn Yunus-1X location where an existing flow-line connects to the South Disouq Central Processing Facility. On a gross basis, the tie-in cost is estimated at US$3.5 million. The discovery will potentially only require one further development well to be drilled, which will not be necessary for another two to three years. SDX drilled the Sobhi well at a 100% working interest and the total cost of the well, including the cost to complete, is estimated at US$3.7 million. Under Clause 8.5 of the Joint Operating Agreement, ‘Premium to Participate in Exclusive Operations’, if the Company’s partner elects to participate in the well now that a discovery has been made, it is required to pay its full 45% share of the well cost, plus a premium of a further 300% of this amount.

About SDX

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 three producing assets: a 55% operated interest in the South Disouq gas field in the Nile Delta and a 50% non-operated interest in each of the North West Gemsa and Meseda concessions, which are located onshore in the Eastern Desert, adjacent to the Gulf of Suez. In Morocco, SDX has a 75% working interest in the Sebou concession, situated in the Gharb Basin. The producing assets in Morocco are characterised by exceptionally low operating costs, making them particularly resilient in a low commodity price environment. SDX’s portfolio also includes high impact exploration opportunities in both Egypt and Morocco.


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