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Tuesday, June 23, 2020
SDX Energy reports that as a result of the Sobhi discovery in South Disouq (SDX Working Interest: 55% and operator), which SDX drilled at 100% working interest, gross plateau production of c.50 MMscfe/d is now expected to be maintained for a further 18-24 months until mid-2023 with the potential for a further extension to mid-2026 depending on the results of planned future exploration drilling.
Management estimates that Sobhi will generate approximately $25.0 million of undiscounted post-tax cash flow after capex to SDX, equivalent to $1.04/Mcf. Sobhi is expected to commence production in Q1 2021 after completion of the standard Environmental Impact Assessment process, agreement of landowners’ compensation, obtaining the necessary Military, Agricultural and Irrigation permits and completion of the pipeline tie-in.
After integrating the results of the successful Sobhi well with the remapped 3D seismic over the South Disouq concession, management estimates that incremental prospective resources of c.100 bcf have been identified and de-risked across five prospects. Approximately 25% of this incremental prospectivity has been identified in a new Buried Hill play concept which is productive in a neighboring field 10 km to the east. Management estimates that these follow-on prospects are expected to have similar costs and post-tax cash flow profiles to Sobhi.
8 to 10 wells are planned in the West Gharib (SDX Working Interest: 50%) concession between 2021 and 2023 for a gross cost of approximately US$8.0-10.0 million (SDX: US$4.0-5.0 million) with the potential to increase gross production from c.3,200 – 3,300 bpd to c.4,000 bpd by 2022.
After taking account of drilling and other infrastructure tie-in capex, this incremental production at West Gharib is expected to generate approximately $5.0-6.0 million in low-risk, undiscounted post-tax cash flow net to SDX.
Mark Reid, CEO of SDX, commented on both the company’s Egypt and Morocco results: “After analyzing the results of the recent drilling successes in Egypt and Morocco, we are very excited about the future prospectivity identified from the Sobhi well in Egypt and from LMS-2 in Morocco.
“With Sobhi, we expect to extend our gross 50 MMscfe/d plateau production by 18-24 months to 2023 and, with some follow on drilling success, this could be extended further into 2026. Sobhi has also helped us identify approximately 100 bcf of follow on, de-risked, incremental prospectivity in the South Disouq concession.
“Finally, we are also looking forward to commencing our drilling campaign in West Gharib next year where we will be aiming to increase production in the Meseda and Rabul fields to approximately gross 4,000 bbls/d by 2022.”
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