SDX Energy Plc (LON:SDX) highlighted its positivity in Egypt and Morocco following analysis of recent well results.
In particular, the Sobhi discovery in South Disouq is now expected to maintain plateau production of 50mln cubic feet per day for a further 18 to 24 months, taking it to mid-2023, and, noted the potential for further extension to mid-2026 subject to further drilling.
Management estimates Sobhi will generate around US$25mln of cash flow to SDX (undiscounted, post-tax, after capex).
Moreover, following analysis of Sobhi, the company estimates incremental prospective resources of c.100 bcf have been identified and de-risked across five prospects. SDX estimates that these prospects will have similar costs and cash flow profiles to Sobhi.
Meanwhile, the company noted that 8-10 wells are planned for the 50% owned West Gharib project between 2021 and 2023, for a gross cost of US$8-10mln. It believes that incremental production growth can generate US$5-6mln of additional low-risk cash flow.
Morocco well test pending
In Morocco, the company is awaiting a test programme for the LMS-2 well, in the Lalla Mimouna, following the lifting of coronavirus restrictions. It is expected that this programme may take place in late in the third quarter or early in the fourth quarter.
Analysis of the LMS-2 well data to date has identified similarities with the LAM-1 discovery which was made by a previous operator. Management estimates see the potential for 1.5bn cubic feet of gas and the potential for 6bn to be in separate compartments within the same feature.
Management believes a further 3.4bn cubic feet of prospective resources will be de-risked by a successful test of the LMS-2 well.
Beyond the detailed 10.9bn cubic feet of prospective resources that could be de-risked, management also identified 25.5bn cubic feet of prospective resources in multiple prospects at Lalla Mimouna.
Management “very excited”
"After analysing the results of the recent drilling successes in Egypt and Morocco, we are very excited about the future prospectivity identified from the Sobhi well in Egypt and from LMS-2 in Morocco,” said Mark Reid, SDX chief executive.
He added: “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."