TIDMSDX
RNS Number : 6519K
SDX Energy PLC
24 April 2020
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
SDX TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET
ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF
THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"),
THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN.
24 April 2020
SDX ENERGY PLC ("SDX" or the "Company")
Successful flow rate test at Sobhi discovery well in Egypt
SDX Energy Plc (AIM: SDX), the MENA-focused oil and gas company,
is pleased to provide an update on well-testing operations at the
SD-12X ("Sobhi"; SDX 100% working interest) discovery well in the
South Disouq Exploration Permit onshore Nile Delta, Egypt (SDX 55%
working interest).
The drill stem test (DST) at the Sobhi well began with a
step-rate test of one hour achieving a maximum rate of 25 mmscf/d
on a 54/64" choke. This initial flow test was followed by a three
hour period flowing at a stable rate of 15 mmscf/d on a 28/64"
choke and then a further four hours flowing at a stable rate of 10
mmscf/d on a 16/64" choke. The well was then shut in for a 12 hour
build-up period during which pressure continued to increase back to
pre-test levels.
From an initial review of the well-test data, it is anticipated
that when connected, the well will produce at an optimum stabilised
rate of 10-12 mmscf/d which is in line with the nearby Ibn Yunus-1X
producing well. The Sobhi well is expected to produce mostly dry
gas as opposed to gas and condensate.
Sobhi will be subject to a longer rig-less test in the coming
weeks which will provide more data to help determine the
recoverable volume in the discovery, which at present management
estimates to be 24 bcf of recoverable resource. The exact timing of
the rig-less test will be dependent on the timing of the
mobilisation of equipment which may be impacted by ongoing Covid-19
restrictions in the region.
Management expect that the Sobhi well will be tied in during
2021 via a 5.8 kilometre tie-in to the Ibn Yunus-1X location where
an existing flow-line connects to the South Disouq Central
Processing Facility. On a gross basis, the tie-in cost is estimated
at US$3.5 million. The discovery will potentially only require one
further development well to be drilled, which will not be necessary
for another two to three years. SDX drilled the Sobhi well at a
100% working interest and the total cost of the well, including the
cost to complete, is estimated at US$3.7 million. Under Clause 8.5
of the Joint Operating Agreement, 'Premium to Participate in
Exclusive Operations', if the Company's partner elects to
participate in the well now that a discovery has been made, it is
required to pay its full 45% share of the well cost, plus a premium
of a further 300% of this amount.
Mark Reid, CEO of SDX, commented:
"We are pleased with these initial well test results which
confirms that we have a commercial discovery at the Sobhi well.
This discovery increases our South Disouq 2P reserves by
approximately 50% given that we sole risked the well. Furthermore,
Sobhi has the potential to extend the current South Disouq plateau
production of 50 mmscfe/d through to 2023/24 with a low-cost tie in
to our existing gas processing plant. To have a commercial gas
discovery of this scale at South Disouq is especially pleasing in
the current environment as our low cost, fixed price gas
development will continue to be highly cash generative for
longer."
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
three producing assets: a 55% operated interest in the South Disouq
gas field in the Nile Delta and a 50% non-operated interest in each
of the North West Gemsa and Meseda concessions, which are located
onshore in the Eastern Desert, adjacent to the Gulf of Suez. 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 commodity 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 and 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 Executive Officer
Tel: +44 203 219 5640
Stifel Nicolaus Europe Limited (Nominated Adviser and Joint Broker)
Callum Stewart
Simon Mensley
Ashton Clanfield
Tel: +44 (0) 20 7710 7600
Peel Hunt LLP (Joint Broker)
Richard Crichton
David McKeown
Cantor Fitzgerald Europe (Joint Broker)
David Porter
Tel: +44 207 7894 7000
Camarco (PR)
Billy Clegg/Owen Roberts/Violet Wilson
Tel: +44 203 757 4980
Glossary
"2P reserves" proved and probable reserves
"bcf" billion cubic feet
-----------------------------
"mmscf/d" million standard cubic feet
per day
-----------------------------
"mmscfe/d" million standard cubic feet
equivalent per day
-----------------------------
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 planned testing, tie-in and total cost of the Sobhi
well should 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 Financial Review for the year ended 31 December 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 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.
Oil and Gas Advisory
Certain disclosures in this news release constitute "anticipated
results" for the purposes of National Instrument 51-101 - Standards
of Disclosure 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,
flow rate and production rates attributable to the resources of the
Company. Such estimates have been prepared by Company management
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.
Use of the term "boe" or the term "mmscf" may be misleading,
particularly if used in isolation. A "boe" conversion ratio of 6
Mcf: 1 bbl and a "Mcf" conversion ratio of 1 bbl: 6 mcf are based
on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the
wellhead.
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
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