TIDMSDX
RNS Number : 7076G
SDX Energy PLC
19 March 2020
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
SDX TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET
ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF
THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"),
THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN.
19 March 2020
SDX ENERGY PLC ("SDX" or the "Company")
Update on drilling operations in Morocco and Egypt
SDX Energy Plc (AIM: SDX), the MENA-focused oil and gas company,
is pleased to provide the following update on its drilling
operations in Morocco and Egypt.
Morocco
The LMS-2 well (SDX 75% working interest) has been drilled to a
measured depth of 1,190 metres, and the Company is pleased to
advise that electric logging has shown that a 10.6 metre net gas
reservoir with 30.9% porosity has been encountered on prognosis at
the base of the H9/Srafen formation. Unlike previous gas
discoveries in the south of the acreage, analyses while drilling
indicated that the different thermogenic composition of the gas
suggests that it is from a new and likely deeper source rock. The
well has been cased and completed and, when changes to Covid-19
restrictions make it possible to bring a well testing crew into the
country, it will be perforated and tested to determine its
potential.
Egypt
The SD-12X (Sohbi) well at South Disouq in Egypt (SDX 55%
working interest, 100% working interest in this well) has commenced
drilling operations.
Sohbi is expected to a reach its targeted depth of approximately
2,300 metres in late April and is targeting gross P50 unrisked
prospective resources of c.33 bcfe, as estimated by management.
Sohbi's primary target is in the same Kafr el Sheikh formation that
the Company's existing Ibn Yunus well is already producing
from.
If successful, the Sohbi well would be tied in during 2021 via a
5.8 kilometre tie-in to the Ibn Yunus-1X location where an existing
flow-line connects to the South Disouq Central Processing Facility.
On a gross basis, this tie in cost is estimated at US$3.5 million.
The 33 bcfe gross P50 unrisked resource targeted by Sohbi would
potentially only require one further development well. SDX will
drill the Sohbi well at a 100% working interest for an estimated
gross dry hole cost of US$2.3 million which will be paid over the
coming three months. Under Clause 8.5 of the Joint Operating
Agreement, 'Premium to Participate in Exclusive Operations', if the
Company's partner elects to participate in the well after a
discovery is made, it is required to pay its full share of the well
cost, plus a premium of a further 300% of this amount.
Mark Reid, CEO of SDX, commented:
"We are encouraged with the initial results at LMS-2 in Morocco,
however, we require this well to be perforated and tested before we
can understand its potential.
Sohbi is an exciting well for the Company, targeting the same
productive formation we are already producing from in Egypt and if
successful, it has the potential to extend the current plateau
production of 50 MMscfe/d to 2024.
I look forward to providing further updates on both wells and
our plan for future drilling in due course.
The Company remains well funded with US$11.0 million of cash as
at 31 December 2019 and US$7.5 million of debt available in our
EBRD credit facility. Furthermore, even at an oil price assumption
of $55/bbl, approximately 80% of 2020 and 90% of 2021 forecast cash
flows are estimated to come from our fixed price gas businesses in
Egypt and Morocco. Given the above, we are positioned strongly to
continue to weather the current fall in oil prices."
About SDX
SDX is an international oil and gas exploration, production and
development company, headquartered in London, United Kingdom, with
a principal focus on MENA. In Egypt, SDX has a working interest in
three producing assets. In the South Disouq gas field in the Nile
Delta, the Company is operator and has a 55% working interest. In
the Eastern Desert, adjacent to the Gulf of Suez, the Company has
two non-operated oil interests; 50% in North West Gemsa and 50% in
Meseda. In Morocco, SDX has a 75% working interest in the Sebou
concession, situated in the Gharb Basin. These producing gas assets
in Morocco are characterised by exceptionally low operating costs
and fixed price gas contracts making them particularly resilient in
a low oil price environment. SDX's portfolio also includes high
impact exploration opportunities in both Egypt and Morocco.
For further information, please see the Company's website at
www.sdxenergy.com or the Company's filed documents at www.sedar.com
.
Competent Persons Statement
In accordance with the guidelines of the AIM Market of the
London Stock Exchange the technical information contained in the
announcement has been reviewed and approved by Rob Cook, VP
Subsurface of SDX. Dr. Cook has over 25 years of oil and gas
industry experience, is the qualified person as defined in the
London Stock Exchange's Guidance Note for Mining and Oil and Gas
companies. Dr. Cook holds a BSc in Geochemistry and a PhD in
Sedimentology from the University of Reading, UK. He is a Chartered
Geologist with the Geological Society of London (Geol Soc) and a
Certified Professional Geologist (CPG-11983) with the American
Institute of Professional Geologists (AIPG).
For further information:
SDX Energy Plc
Mark Reid
Chief Executive Officer
Tel: +44 203 219 5640
Stifel Nicolaus Europe Limited (Nominated Adviser and Joint Broker)
Callum Stewart
Nicholas Rhodes
Ashton Clanfield
Tel: +44 (0) 20 7710 7600
Peel Hunt LLP (Joint Broker)
Richard Crichton
David McKeown
Cantor Fitzgerald Europe (Joint Broker)
David Porter
Tel: +44 207 7894 7000
Camarco (PR)
Billy Clegg/Owen Roberts/Violet Wilson
Tel: +44 203 757 4980
Glossary
"bcfe" billion cubic feet equivalent
"MMscfe/d" million standard cubic feet
equivalent per day
------------------------------
Forward-Looking Information
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 future drilling campaigns and results in Morocco and
Egypt and more specifically the results of testing LMS-2 in Morocco
,the impact of Covid-19 restrictions in being able to test the well
and the prospects for the Sohbi well should all 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 Management's Discussion & Analysis for the three and nine
months ended 30 September 2019, which can be found on SDX's SEDAR
profile at www.sedar.com , for a description of additional risks
and uncertainties associated with SDX's business, including its
exploration activities.
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 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
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.
Prospective Resources
The prospective resource 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 National Instrument 51-101 -
Standards of Disclosure for Oil and Gas Activities. The prospective
resources disclosed herein have an effective date of 1 January
2020. Prospective resources are those quantities of gas, estimated
as of the given date, to be potentially recoverable from
undiscovered accumulations through future development projects. As
prospective resources, there is no certainty that any portion of
the resources will be discovered. The chance that an exploration
project will result in a discovery is referred to as the "chance of
discovery" as defined by the management of the Company. 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.
"P50" means that there is at least a 50% probability that the
quantities actually recovered will equal or exceed the best
estimate.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
DRLFLFSTVDITLII
(END) Dow Jones Newswires
March 19, 2020 03:00 ET (07:00 GMT)
Sdx Energy (LSE:SDX)
Historical Stock Chart
From Jun 2024 to Jul 2024
Sdx Energy (LSE:SDX)
Historical Stock Chart
From Jul 2023 to Jul 2024