SDX Energy issues trading update
SDX Energy, the London-listed explorer active in North Africa and the Middle East, saw average entitlement production rise 10% on its mid-point 2022 market guidance to 3,778 barrels of oil equivalent/day, the company said in its trading and operations update on June 14.
The update, which comes ahead of SDX Energy's annual general meeting, largely focused on its Egyptian portfolio, following a successful campaign at the South Disouq concession earlier this year. Three discoveries were made and South Disouq is now producing above the 2022 guidance. Based on the drilling results, South Disouq's prospectivity forecast has been upgraded. It is now estimated to hold 145bn ft3 in gas resources, though around 100bn ft3 of this potential lies in licences coming up for renewal.
The SD-5X well at South Disouq launched ahead of schedule, making a swift contribution to SDX's output and cash flow. At this stage it is yielding more condensate than expected, producing around 100 to 110 barrels/day in gross terms, up from SDX's pre-drill forecast of 25 to 30 barrels/day. SD-5X encountered a 55.5 ft net-pay gas sand structure when it was drilled, at measured depths of around 6,973 ft.
SDX is still performing tests at the other two gas finds. SD-12 East is undergoing a pressure build up test, while MA-1X is expected to begin testing in coming days. SDX has disposed of 33% of the shares in the entity that holds its interests in South Disouq for $5.5mn.
Output fell below guidance at one of SDX's Moroccan concessions, the West Gharib oil project, due to mechanical issues with the drilling rig, which is now being replaced. SDX said overall Moroccan production rose in the first five months of the year. Three oil wells in the West Gharib area were recently completed, and two of these are now pumping crude into SDX's portfolio.
SDX is preparing for a further drilling campaign in Morocco, with a seven-well programme due to launch in July 2022. SDX was forced to suspend the campaign last December due to operational issues.
Mark Reid, CEO of SDX, commented: "I am very pleased to report a strong operational and financial performance update ahead of this year's AGM.
"Our drilling results in South Disouq and West Gharib over the past five months have been excellent with six successful wells and with operations ongoing on another well at West Gharib.
"A one hundred percent success rate to date. Our drilling success in South Disouq in particular has enabled us to identify further material prospectivity in and around our leases."