SDX Brings Egyptian Gas Field on Stream
North Africa-focused SDX Energy has launched production at the onshore South Disouq gas field in Egypt, it announced in a London stock exchange filing on November 12.
Four discovery wells have been flowing gas at rates of between 8-15mn ft3/day since November 7, SDX said. Their gas is being pumped to the South Disouq central processing facility, which has seen average daily production of 23mn ft3 of gas and 120 barrels of condensate over the past three days. An output plateau of 50mn ft3/day is expected to reached in the first quarter of 2020, the company said.
SDX has previously said the field’s launch would be “transformative” for the company, which operates concessions both in Egypt and Morocco.
“South Disouq’s production, which is coming on stream in line with our previous guidance, will result in a material increase to Company's cashflows going forward,” CEO Mark Reid said in a statement.
Analyst Malcolm Graham-Wood said in a blog post: "Whilst the bringing on of South Disouq is painfully late it will be an important milestone and investors can look forward to an exciting exploration programme in Morocco over the next few months."
SDX owns a 55% stake in the South Disouq concession, with partner IPR Energy holding the remaining interest. The field’s gas will be sold to Egypt’s national gas company Egas at a fixed price of $2.85/1,000 ft3, SDX said. The Egyptian government has a 51% entitlement share of gross production.
Cash flow from South Disouq should help SDX reverse recent losses incurred because of high operating costs. The company last month also kicked off a 12-well drilling campaign in Morocco’s Gharb basin to build up its resource base.