SDX Energy Plc (AIM: SDX), the MENA-focused oil and gas company, is pleased to announce the commencement of a 12 well drilling campaign, targeting a mean 15bcf of gross unrisked prospective resources, in its operated Gharb Basin (SDX: 75% working interest) acreage in Morocco.
The first seven wells located in the Company's core producing concessions at Sebou and Gharb Centre are lower-risk appraisal wells targeting prospects which are close to existing infrastructure. These wells can be tied in quickly, at low cost, and are similar in geological risk to the discoveries already made and producing in this area.
These seven appraisal wells will be followed by two step-out exploration wells further to the north in Gharb Centre and outside the reach of the Company's existing infrastructure. These two exploration wells are targeting prospects which are similar to the discoveries made in Sebou and Gharb Centre albeit they are deemed higher risk as this part of the concession has not been previously tested. Success here could open up this northern area of the concession for extensive follow-on drilling.
The last three wells of the campaign are expected to be higher-risk exploration wells in the Lalla Mimouna Nord concession, targeting larger prospects in deeper, as yet unproven, horizons.
In order to optimise operations and reduce costs, SDX has secured an advanced North American rig to reduce drilling time. Furthermore, the Company will perforate and test successful wells in separate campaigns, with multiple wells tested back to back in each campaign to reduce equipment mobilisation costs. The drilling campaign is expected to complete in Q1 2020.
SDX will update the market on the progress of the drilling campaign at the earlier of the completion of the first testing campaign, which will cover up to four of the first seven appraisal wells, or the issuance of the Company's planned year end operational update in early January 2020.
Mark Reid, CFO and Interim CEO of SDX, commented:
"SDX is pleased to announce the start of its drilling campaign in Morocco. The 12 wells have three key objectives. The first objective is to drill seven lower risk wells in our existing core producing area. These wells are close to existing infrastructure and will increase reserves for the continued supply of gas to our existing customers.
Our second objective is to drill two step-out exploration wells to the north of our core production area which, if successful, would open up new, target-rich acreage for future drilling. The final objective of the campaign is to test larger but higher-risk prospects in the Lalla Mimouna Nord concession. To do this, we plan to drill up to three wells, however, if the first well does not meet our expectations, we may move the rig back to our core producing area and complete the campaign by drilling two further lower-risk, but smaller, prospects to add additional reserves. We expect the campaign to complete in Q1 2020 and we look forward to updating the market on progress in due course."
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 (50% North West Gemsa & 50% Meseda) located onshore in the Eastern Desert, adjacent to the Gulf of Suez. In addition, the Company has a 55% operated interest in the South Disouq gas project in the Nile Delta which is expected to commence production in mid-Q4 2019. 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 oil price environment. SDX's portfolio also includes high impact exploration opportunities in both Egypt and Morocco.
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 Rob Cook, VP Subsurface of SDX. Dr. Cook has over 25 years of oil and gas industry experience, 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).