SDX Encounters Gas in Morocco

Thursday, March 19, 2020

SDX Energy provided and update on its recent analysis of the LMS-2 well (SDX 75% working interest) which was been drilled to a measured depth of 1,190 meters. The company advised that electric logging has shown that a 10.6-meter net gas reservoir with 30.9% porosity has been encountered on prognosis at the base of the H9/Srafen formation.

Unlike previous gas discoveries in the south of the acreage, analyses while drilling indicated that the different thermogenic composition of the gas suggests that it is from a new and likely deeper source rock. The well has been cased and completed and, when changes to Covid-19 restrictions make it possible to bring a well testing crew into the country, it will be perforated and tested to determine its potential.

Mark Reid, CEO of SDX, commented: “We are encouraged with the initial results at LMS-2 in Morocco, however, we require this well to be perforated and tested before we can understand its potential.

“The Company remains well funded with US$11.0 million of cash as at 31 December 2019 and US$7.5 million of debt available in our EBRD credit facility. Furthermore, even at an oil price assumption of $55/bbl, approximately 80% of 2020 and 90% of 2021 forecast cash flows are estimated to come from our fixed price gas businesses in Egypt and Morocco. Given the above, we are positioned strongly to continue to weather the current fall in oil prices.”

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