SDX Energy PLC - Operational update and new corporate presentation
Post-drilling extension of plateau production at South Disouq and de-risked prospectivity in both
· 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 Sobhi1 will generate approximately
· 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 neighbouring 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
· After taking account of drilling and other infrastructure tie-in capex, this incremental production at West Gharib is expected to generate approximately
Note 1 - 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.
· Post-drill analysis of the LMS-2 well at Lalla Mimouna (SDX Working Interest: 75% and operator) has identified similarities with the LAM-1 discovery made by the previous operator of the concession which flowed gas and condensate in 2015.
o Subject to successful testing, management estimates that LMS-2 could contain c.1.5 bcf and has the potential to de-risk a further 6.0 bcf in separate compartments within the same feature.
o Management also estimates that a further 3.4 bcf of close by prospective resources will be de-risked if LMS-2 tests successfully, increasing the overall prospective resource potential to 10.9 bcf.
o LMS-2 will be tested after the COVID-19 restrictions in
· In addition to the 10.9bcf of prospective resources that could be de-risked by LMS-2, management has identified a further 25.5 bcf of prospective resources in multiple prospects across the concession.
"After analysing the results of the recent drilling successes in
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."
SDX is an international oil and gas exploration, production and development company, headquartered in
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billion cubic feet
barrels per day
thousand cubic feet
million standard cubic feet equivalent
million standard cubic feet equivalent per day
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 ability to increase its plateau production at South Disouq in Egypt, the results of the upcoming well test at LMS-2 in Morocco, management estimates of future net revenue and the potential success of future drilling campaigns 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
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 ("NI 51-101") 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.
Prospective Resources Data
The prospective resources estimates disclosed or referenced herein have been prepared by Dr. Rob Cook, a qualified reserves evaluator, in accordance with the Canadian Oil and Gas Evaluation Handbook and in accordance with NI 51-101. The prospective resources disclosed herein have an effective date of
There is no certainty that it will be commercially viable to produce any portion of the resources discussed herein; though any discovery that is commercially viable would be tied back to the Company's pipeline in Morocco and then connected to customers' facilities within 9 to 12 months of discovery. Based upon the economic analysis undertaken on any discovery, management has attributed an associated chance of development of 100%.
There are uncertainties associated with the volume estimates of the prospective resources disclosed herein, due to the level of information available on prospective resources, but ranges are defined based on data from the Company's nearby existing analogous wells. Some of the risks and uncertainties are outlined below:
· petrophysical parameters of the sand/reservoir;
· fluid composition, especially heavy end hydrocarbons;
· accurate estimation of reservoir conditions (pressure and temperature);
· reservoir drive mechanism;
· potential well deliverability; and
· the thickness and lateral extent of the reservoir section, currently based on 3D seismic data.
Future Net Revenue Estimates
The future net revenue estimates disclosed or referenced herein have been prepared by Dr. Rob Cook, a qualified reserves evaluator, in accordance with the Canadian Oil and Gas Evaluation Handbook and in accordance with NI 51-101 and the requirements specified in Form 51-101F1. All evaluations of the present value of estimated future net revenue are stated after provision for estimated future capital expenditures but prior to indirect costs and do not necessarily represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. There are numerous uncertainties inherent in estimating quantities of reserves and the future cash flows attributed to such reserves. Estimates of reserves and future net revenue for individual properties may not reflect the same level of confidence as estimates of reserves and future net revenue for all properties, due to the effect of aggregation. The effective date of the future net revenue estimates disclosed or referenced herein is
This announcement does not contain inside information.
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