SDX Energy PLC (LON:SDX) has told investors that the BMK-1 exploration well has encountered commercial quantities of gas in two targeted horizons.
BMK-1 was described previously as a “play-opening” well and the result confirms that the core productive area in Morocco extends north, de-risking some 20bn cubic feet of prospective gas resources. The result is expected to significantly extend the life of resources.
BMK-1 was drilled down to a depth of 1,551 metres. It encountered the Upper Guebbas reservoir at a depth of 1,190 metres and the Lower Guebbas was found from 1,475 metres.
Based on drilling data, the company estimated that there was a total of 0.9bn cubic feet in the Upper and Lower Guebbas targets, in line with pre-drill estimates.
"The BMK-1 result in Morocco is excellent news, confirming that together with the OYF-2 discovery in January, we can now plan to develop a material and valuable new prospective area to the north of our existing infrastructure in a market where we are the only gas producer and where we receive gas prices of between US$10-12 per mmcf,” said Mark Reid, SDX chief executive.
“An additional 20 bcf of P50 prospective resources has the potential to significantly extend reserve life and support lower CO2 emissions at our customers.”
SDX is now moving its rig to drill the Lalla Mimouna concession to drill the potentially play-opening LMS-2 well.
It will be the tenth well in its Moroccan campaign that has fulfilled key objectives and the company has decided to defer two final wells – which were not due to be connected to production infrastructure – into a subsequent phase of drilling, in order to preserve capital.
Elsewhere, in Egypt, the SD-6X (Salah) exploration well at the South Disouq project reached a target depth of 3,167 metres. It encountered multiple gas sections but they were thinner than expected, and, the well is deemed as sub-economic.
The company noted that the result does not have any technical ‘read across’ to SD-12X which will be the next well at South Disouq, which is slated to spud in the next two to three weeks.