TIDMSDX
RNS Number : 8959Q
SDX Energy PLC
25 October 2019
25 October 2019
SDX ENERGY PLC
("SDX" or the "Company")
COMMENCEMENT OF DRILLING OPERATIONS IN MOROCCO
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."
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
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.
For further information, please see the Company's website at
www.sdxenergy.com or the Company's filed documents at
www.sedar.com.
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).
For further information:
SDX Energy Plc
Mark Reid
Chief Financial Officer and Interim
Chief Executive Officer
Tel: +44 203 219 5640
Stifel Nicolaus Europe Limited (Nominated Adviser and Joint Broker)
Callum Stewart
Nicholas Rhodes
Ashton Clanfield
Tel: +44 (0) 20 7710 7600
Cantor Fitzgerald Europe (Joint Broker)
David Porter
Tel: +44 207 7894 7000
GMP FirstEnergy (Joint Broker)
Jonathan Wright
Tel: +44 207 448 0200
Celicourt (PR)
Mark Antelme/Jimmy Lea/Ollie Mills
Tel: +44 208 434 2754
Glossary
"bcf" billions of cubic feet
"Prospective Resources" quantities of hydrocarbon estimated,
as of a given date, to be potentially
recoverable from undiscovered
accumulations by application
of future development projects.
Prospective Resources have both
an associated chance of discovery
and a chance of development
---------------------------------------
Forward-Looking Information
Certain statements contained in this press release may
constitute "forward-looking information" as such term is used in
applicable Canadian securities laws. Any statements that express or
involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future
events or are not statements of historical fact should be viewed as
forward-looking information. In particular, statements regarding
the Company's drilling plans in Morocco and the timing and costs
thereof, as well as capital expenditures, operational expenditures
and prospective opportunities, should all be regarded as
forward-looking information.
The forward-looking information contained in this document is
based on certain assumptions and although management considers
these assumptions to be reasonable based on information currently
available to them, undue reliance should not be placed on the
forward-looking information because SDX can give no assurances that
they may prove to be correct. This includes, but is not limited to,
assumptions related to, among other things, commodity prices and
interest and foreign exchange rates; planned synergies, capital
efficiencies and cost-savings; applicable tax laws; future
production rates; receipt of necessary permits; the sufficiency of
budgeted capital expenditures in carrying out planned activities
and the availability and cost of labour and services.
All timing given in this announcement, unless stated otherwise
is indicative and while the Company endeavours to provide accurate
timing to the market, it cautions that, due to the nature of its
operations and reliance on third parties, this is subject to
change, often at little or no notice. If there is a delay or change
to any of the timings indicated in this announcement, the Company
shall update the market without delay.
Forward-looking information is subject to certain risks and
uncertainties (both general and specific) that could cause actual
events or outcomes to differ materially from those anticipated or
implied by such forward-looking statements. Such risks and other
factors include, but are not limited to, political, social, and
other risks inherent in daily operations for the Company, risks
associated with the industries in which the Company operates, such
as: operational risks; delays or changes in plans with respect to
growth projects or capital expenditures; costs and expenses;
health, safety and environmental risks; commodity price, interest
rate and exchange rate fluctuations; environmental risks;
competition; permitting risks; the ability to access sufficient
capital from internal and external sources; and changes in
legislation, including but not limited to tax laws and
environmental regulations. Readers are cautioned that the foregoing
list of risk factors is not exhaustive and are advised to refer to
SDX's Management's Discussion & Analysis for the three and six
months ended 30 June 2019, which can be found on SDX's SEDAR
profile at www.sedar.com, for a description of additional risks and
uncertainties associated with SDX's business, including its
exploration, development and production activities.
The forward-looking information contained in this press release
is as of the date hereof and SDX does not undertake any obligation
to update publicly or to revise any of the included
forward--looking information, except as required by applicable law.
The forward--looking information contained herein is expressly
qualified by this cautionary statement.
This announcement does not contain inside information.
Oil and Gas Advisory
Estimates of reserves have been made, assuming the development
of each property in which the estimate is made will actually occur,
without regard to the likely availability to the Company of funding
required for the development of such reserves.
Certain disclosure in this news release constitute "anticipated
results" for the purposes of National Instrument 51-101 - Standards
for Oil and Gas Activities of the Canadian Securities
Administrators because the disclosure in question may, in the
opinion of a reasonable person, indicate the potential value or
quantities of resources in respect of the Company's resources or a
portion of its resources. Without limitation, the anticipated
results disclosed in this news release include estimates of volume
attributable to the resources of the Company. Such estimates have
been prepared by management of the Company and have not been
prepared or reviewed by an independent qualified reserves evaluator
or auditor. Anticipated results are subject to certain risks and
uncertainties, including those described above and various
geological, technical, operational, engineering, commercial, and
technical risks. In addition, the geotechnical analysis and
engineering to be conducted in respect of such resources is not
complete. Such risks and uncertainties may cause the anticipated
results disclosed herein to be inaccurate. Actual results may vary,
perhaps materially.
Prospective Resources
The prospective resource estimates disclosed herein have been
prepared by an independent qualified reserves evaluator, ERC
Equipoise Limited, in accordance with the Society of Petroleum
Engineers' Canadian Oil and Gas Evaluation Handbook. The
prospective resources disclosed herein have an effective date of 1
January 2019. Prospective resources are those quantities of gas,
estimated as of the given date, to be potentially recoverable from
undiscovered accumulations through future development projects. As
prospective resources, there is no certainty that any portion of
the resources will be discovered. The chance that an exploration
project will result in a discovery is referred to as the "chance of
discovery" as defined by the management of the Company. There is no
certainty that it will be commercially viable to produce any
portion of the resources discussed herein; though any discovery
that is commercially viable would be tied back to the Company's
pipeline in Morocco and then connected to customers' facilities
within 9 to 12 months of discovery. Based upon the economic
analysis undertaken on any discovery, management has attributed an
associated chance of development of 100%. Anticipated results are
subject to certain risks and uncertainties, including various
geological, technical, operational, engineering, commercial and
technical risks. In addition, the geotechnical analysis and
engineering to be conducted in respect of such resources is not
complete. Such risks and uncertainties may cause the anticipated
results disclosed herein to be inaccurate. Actual results may vary,
perhaps materially.
There are uncertainties associated with the volume estimates of
the prospective resources disclosed herein, due to the level of
information available on prospective resources, but ranges are
defined based on data from the Company's nearby existing analogous
wells. Some of the risk and uncertainties are outlined below:
-- Petrophysical parameters of the sand/reservoir;
-- Fluid composition, especially heavy end hydrocarbons;
-- Accurate estimation of reservoir conditions (pressure and temperature);
-- Reservoir drive mechanism;
-- Potential well deliverability; and
-- The thickness and lateral extent of the reservoir section,
currently based on 3D seismic data.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
DRLMJBBTMBATBJL
(END) Dow Jones Newswires
October 25, 2019 02:00 ET (06:00 GMT)
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