SDX Energy PLC (LON:SDX) has announced a new discovery at the South Disouq project in Egypt, with the SD-12X (Sobhi) well encountering 108 feet of net high-quality gas-bearing sands.
"This is an excellent result for SDX and fully justifies our confidence to drill this well on a sole risk basis,” Mark Reid, SDX chief executive said in a statement.
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Reid added: “South Disouq represents our flagship asset and in the current economic climate this fixed price, low-cost gas development is highly-cash generative for the group.
“The Sobhi discovery has the potential to extend the current South Disouq plateau production of 50 MMscfe/d through to 2023/24 with a low-cost tie in, utilising the existing gas processing plant. We look forwarding to updating the market further following the testing of the well."
The well is expected to be tied-in to South Disouq’s production facilities in 2021, via a connection to the Ibn Yunus-1X location which is 5.8 kilometres away. This will cost around US$3.5mln, the company estimates.
Some 24bn cubic feet of gas was confirmed with the discovery well and the company expects it will need only one more development well to access all this resource – though it notes that such drilling may not be possible for another two to three years.
SDX drilled and funded 100% of the Sobhi well, approximately US$3.7mln. The terms of the joint operating agreement for South Disouq states that a partner can elect to participate after discovery, by paying 45% of the well cost plus a 300% premium.