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SDX Energy confirms second gas discovery in Egypt (SDX)

North Africa-focused oil and gas firm SDX Energy (LSE:SDX) has reported its second gas discovery in South Disouq, Egypt. After spudding last month, the Ibn Ynus-1X well, where SDX is the operator and owns a 55pc working interest, was drilled to 9068ft and encountered 100.8ft of net conventional natural gas pay.

SDX said the well came in as expected but with a reservoir section that was of better quality and thicker than pre-drill expectations. Shares were up 2.6pc, or 1.3p, to 50p following the news. The well will be completed as a producer in the prolific Abu Madi Baltim trend and then tested between 30 and 45 days after the drilling rig moves off location, depending on the availability of testing equipment. SDX then expects the well to connect to infrastructure located near SD-1X, the company’s original discovery in South Disouq, where production is anticipated to begin in the second half of this year.

Paul Welch, president and chief executive of SDX, said: ‘We are extremely encouraged with today’s discovery, our second consecutive discovery at South Disouq.  This highly positive drilling result further demonstrates the very significant natural gas potential the licence holds.  Combined, these two successful wells confirm our views of the subsurface geology and demonstrate that we are on course to realise the full potential of the licence. We look forward to updating shareholders on future developments at South Disouq in due course.”

Last month, SDX announced a gas discovery at its SAH-2 well on the Sebou permit in Morocco. The well was drilled to a total depth of 1,304 meters and encountered 5.2 meters of net conventional natural gas pay across two zones in the Guebbas and Hoot formations with an average porosity in the pay section of 33%. Like Ibn Ynus-1X, the well came in on prognosis but with a reservoir thickness above pre-drill expectations, and sent SDX’s share up by 4.3pc. The well achieved an average flow rate of conventional natural gas of 12.9 million standard cubic feet per day (“MMscf/d”), with a maximum flow rate during this test of 13.5 MMscf/d

Author: Daniel Flynn

Disclosure: The author of this piece does not own shares in the company mentioned

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