SDX Energy discovers gas in OYF-2 well, Morocco
SDX Energy, the MENA-focused oil and gas company announces that the OYF-2 well in Morocco (SDX 75% working interest) has been drilled to a measured depth of 1,210 meters and has encountered commercial quantities of gas in excess of pre-drill estimates.
The discovery also confirms that the Company's core productive area extends to the north. Both the Upper and Lower Guebbas targets in OYF-2 were encountered and reservoir thickness and quality were better than pre-drill expectations. The Upper Guebbas was encountered at a measured depth of 1,001 meters, while the Lower Guebbas was penetrated at a measured depth of 1,120 meters.
Management estimates that approximately 1.3 to 1.9 bcf1 of gas is recoverable from the horizons encountered by the OYF-2 well, which will be tested in February. The discovery will be tied into the Company's infrastructure when required, at an estimated cost of approximately US$2 million net to SDX. Furthermore, the discovery has de-risked a further 0.5 to 1.0 bcf of Prospective Resources2 in the western compartment of the Lower Guebbas target which the Company expects to recover with a single development well in the future.
The rig has now moved to the BMK-1 location, which is approximately 11 kilometres to the north of OYF-2. BMK-1 will again test the extent of the northern expansion of the Company's core productive area and, if successful, could de-risk a number of similar close-by prospects. After BMK-1, one more close to infrastructure well and two other potentially play-opening wells in Lalla Mimouna will be drilled to complete the campaign in March.
SDX also announces that preparations at South Disouq, Egypt (where it has 55% working interest) continue for two exploration wells targeting gross unrisked P50 volumes of up to 104 bcf from the same horizons encountered in the Company's four discoveries to date. The first well, Salah, which is expected to spud in mid/late February and complete in April 2020, is targeting a gross unrisked P50 prospect of 71 bcfe (Company estimate)1.
The second well, Sobhi, which is expected to spud in late April/early May and complete in early June, is targeting a gross unrisked P50 prospect of 33 bcfe (Company estimate) 1. If successful, these two wells would require short, 8.0 kilometre and 5.8 kilometre, tie-ins to the South Disouq Central Processing Facility with SDX's share of the tie-in cost estimated at US$2.5 million and US$1.9 million respectively.
In early February, SDX is also planning to spud an appraisal/development well in the Rabul area of its West Gharib concession, where it has a working interest of 50%. If successful, this well could add approximately gross 200-300 bbl/d of production.
Mark Reid, CEO of SDX, commented:
"We have a particularly busy year ahead with the drill bit, giving us the opportunity to increase significantly the Company's reserves life. OYF-2 in Morocco is a very positive start, a discovery which is larger than pre drill expectations, and confirmation that our core productive area extends to the north. With the planned follow on development well, we now have the potential to increase our total reserves in Morocco to approximately three to four years of customer demand with our gas being sold under five and ten year fixed priced contracts at an average gas price of circa US$11/mcf. With the imminent commencement of drilling campaigns in South Disouq and West Gharib in Egypt, together with the ongoing drilling campaign in Morocco, we have a very busy period of activity ahead of us with three rigs drilling simultaneously. I look forward to providing further updates on these campaigns in due course."