SDX Energy Provides Operations Update in EgyptSource: www.gulfoilandgas.com 1/28/2019, Location: Egypt
SDX Energy Inc. (SDX), the North Africa focused oil and gas company, provides its 2019 operational outlook and advises of its intention to delist from the TSXV in conjunction with a move of its corporate residence of the Group’s holding company to the UK from Canada.
Egypt - Meseda Concession (50% Working Interest, Non-Operator)
• 2019 gross production guidance of 4,000-4,200 bopd.
• The operator plans to drill two wells in H1 2019. One well in Rabul which will continue to develop the discovery area and one development location in the Meseda field.
• The operator also plans to replace up to five electrical submersible pumps (ESPs) in the wider Meseda area and upgrade water handling capabilities at the field facilities.
• Gross capex in 2019 is expected to be approximately US$8 million (US$4 million net to SDX of which US$1.6 million relates to the two planned wells and US$2.4 million relates to ESP replacements and the facilities upgrade).
Egypt - North West Gemsa Concession (50% Working Interest, Non-Operator) • 2019 gross production guidance of 3,400-3,600 boepd.
• The operator is planning to complete up to 10 workovers and carry out infrastructure maintenance, but not drill any additional wells.
• As the field is now fully developed, gross capex in 2019 is expected to be approximately US$4 million (US$2 million net to SDX).
Egypt - South Disouq Concession (55% Working Interest, Operator)
• During H1 2019, SDX will complete construction of the Central Processing Facility, the 10km export pipeline and the tie-ins for the four existing production wells.
• First gas is targeted for mid-2019, at a gross plateau production rate of between 50-60 MMscf/d with the conventional natural gas being sold to the State at a price of US$2.85/Mcf.
• Prospect inventory for future drilling is expected to increase with the interpretation of the recently acquired 170km2 of 3D seismic in the southern section of the concession.
• The Company is planning to drill two further exploration wells in 2019, with multiple additional conventional gas prospects and a conventional oil prospect also identified for future drilling.
• Gross capex in 2019 is expected to be approximately US$40.0 million (US$22.0 million net to SDX of which approximately US$18.5 million relates to the South Disouq development activities and US$3.5 million relates to the two planned exploration wells).
Egypt - South Ramadan Concession (12.75% Working Interest, Non-Operator)
• The Company continues to review technical data from the recently announced SRM-3 well result and will provide further updates to the market in due course.
Paul Welch, President & CEO of SDX Energy, commented:
“We are pleased to provide an update on our operational outlook for 2019, which is set to be a landmark year for the Company. Looking ahead, there are a number of important milestones that we intend to meet across the portfolio, which have the potential to deliver significant value for shareholders.
In Egypt, a 10 well workover programme is set to commence at North West Gemsa and further drilling opportunities at Meseda means that we now expect to grow gross production from this asset in 2019. At South Disouq, completing the Central Processing Facility and achieving first gas from the licence will be a landmark event for SDX. We continue to believe that South Disouq contains considerable upside potential and we look forward to updating the market on further operational progress on the licence in due course. We are also excited to start the 12 well drilling campaign in Morocco in the second half of the year, given the significant drilling success we achieved with our drilling programme last year.
In keeping with SDX’s corporate strategy, we are keen to be as cost efficient as possible and we see delisting from the TSXV as a way to achieve further cost savings for the business. SDX continues to assess value accretive M&A opportunities that have the potential to enhance the Company’s production scale and generate value for shareholders. We remain upbeat about the year ahead and look forward to updating the market across our operations throughout 2019. “
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