SDX Achieves First gas at SD-12X Well, Targets 9 Wells in 2021

SDX Energy has announced that the SD-12X (Sobhi) well in the South Disouq license, where the operator 100% entitlement interest, coming on stream six weeks ahead of schedule. According to SDX the SD-12X exploration well which was the commercial discovery in the Kafr el Sheikh  formation  in Q2’20,  achieved first gas from the well on 21 December 2020.

Management estimates that SD-12X has approximately 24 bcf of recoverable resources and can produce at a rate of up to 10-12 MMscf/d. At present, the well is producing at approximately 5-7 MMscf/d and continues to be monitored to determine its optimum production rate.

Trading and operations update twelve months to 31 December 2020 

Production 

·      Average entitlement production for the year of c.6,400 boe/d, an increase of 58% from FY 2019 and exceeding 2020 guidance of 6,000-6,250 boe/d. 

·      Moroccan customers back to their March 2020 pre-Covid close down consumption levels. 

·      Production from all core assets either exceeded or was at the top end of guidance

2021 Drilling and prospectivity: Nine wells to be drilled in 2021 

·      Two wells in South Disouq (55% W.I.) 

·      Following the success of SD-12X at South Disouq and upon further review of the 3D seismic, management has 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 are now viewed as ready-to-drill prospects. 

·      During Q2 and Q3’21 the Hanut prospect, which Company estimates has an unrisked mean recoverable volumes of 139bcf with a 33% chance of success, will be drilled, together with Ibn Yunus-2, a development well, into our existing 46Bcf producing discovery at Ibn Yunus which will further accelerate production and ensure that the CPF throughput continues to be optimised. 

·      The net drilling costs to the Company of these two wells, reflecting the dry hole cost of Hanut only, is estimated at US$3.6 million and the net tie in cost of Ibn Yunus-2 is US$0.3 million. The Company’s partner in the concession has now confirmed that it will participate in both of these wells. 

·      Three wells in West Gharib (50% W.I.) 

·      The Company plans to drill a minimum of three development wells in the concession during 2021 with the campaign expected to commence in Q2/Q3’21. 

·      The three wells are targeting approximately gross 1 million barrels of recoverable resources and each of these wells is expected to produce gross 300-400bbl/d. 

·      The net cost of the campaign to the Company, including tie in, is expected to be c.US$1.5 million. 

·      Four wells in Morocco (75% W.I.) 

·      During the year, the Company will drill four ‘close to infrastructure’ appraisal/development wells, two of which will be deepened to target the newly discovered Top Nappe play.  The LMS-2 discovery will also be tested in 2021. 

·      The campaign which will commence in early Q2’21 and complete late Q3/early Q4’21 will target approximately gross 2 bcf of recoverable resources, excluding the volumes in any potential Top Nappe prospects, which are still being assessed. 

·      Including tie in costs, the campaign is expected to cost the Company c.US$12 million.