TIDMSDX
RNS Number : 6692R
SDX Energy Inc.
18 June 2018
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.
18 June 2018
SDX ENERGY INC.
("SDX" or the "Company")
Gas discovery at SD-4X well, Egypt, LMS-1 Well Test Results
SDX Energy Inc. (TSXV, AIM: SDX), the North Africa focused oil
and gas company, is pleased to announce that a gas discovery has
been made at its SD-4X well in the South Disouq Concession, Egypt
(SDX 55% working interest and operator).
The SD-4X well was drilled to a total depth of 7806 feet and
encountered 89 feet of net conventional natural gas pay in the Abu
Madi horizon, which had an average porosity in the pay section of
24%. The well came in on prognosis with a reservoir section of
similar quality but thicker than the original SD-1X discovery
well.
The well will be completed as a producer in the Abu Madi and
then tested after the drilling rig has moved off location. The
testing is anticipated to commence between 30 and 45 days after the
rig departs, depending on the availability of testing equipment.
Assuming a successful test, it is anticipated that the well will be
connected to the infrastructure located adjacent to the original
SD-1X discovery, where production start-up is anticipated late in
the 4(th) quarter of 2018. After completion, the rig will move to
the SD-3X well which is the second of two appraisal locations
included in the 2018 development program.
The well test program in the LMS-1 well in the Company's Lalla
Mimouna Nord permit in Morocco has been completed. Upon test the
well flowed at sub-commercial rates which at this stage we believe
are temporary and due to damage created by the fluids used to
control the elevated pressures encountered in the well whilst
drilling, however this is still being investigated. At present, we
believe the damage is the result of formation clays reacting to
certain components used to increase the mud weight of the drilling
fluid. The reservoir section, beyond this zone of damage, is
thought to be of excellent quality based upon the well log response
and is not expected to have been damaged by the drilling fluids.
Once the fluid interaction study is complete, a stimulation program
will be designed and implemented and the well test will be
repeated.
Paul Welch, President and CEO of SDX, commented:
"We are extremely encouraged by today's result at South Disouq.
We had anticipated a thickening of the pay section as we moved away
from the crest of the structure, and this has now been confirmed.
We will now accelerate our development activity in the area. It's
our intent to establish production from both the South Disouq and
Ibn Yunus areas before year end 2018. These results demonstrate the
significant potential we see in this area.
"At LMS-1, we were very surprised by the results of the flow
test. The well flowed a significant amount of gas whist drilling
requiring the drilling mud weight to be increased to control the
well so it could be logged and completed. That said, this part of
the basin is a frontier area and this was the first time this
section had been drilled, so the composition of the reservoir
section was unknown. Fortunately, we have a complete data set from
this well which will allow us to quickly and accurately design a
stimulation program for this, which we are confident will
work."
"Overall we are very pleased with our recent drilling activity.
In Morocco we had seven successful results from our nine well
program and in Egypt we have had three successes out of the four
wells drilled to date with one well to go. I am looking forward to
updating our shareholders on the well test results of the SD-4X,
the spud of SD-3X and the progress we are making on our development
activity in South Disouq along with our plans to retest the LMS-1
in Morocco in due course."
About SDX
SDX is an international oil and gas exploration, production and
development company, headquartered in London, England, UK, with a
principal focus on North Africa. In Egypt, SDX has a working
interest in two producing assets (50% North West Gemsa & 50%
Meseda) located onshore in the Eastern Desert, adjacent to the Gulf
of Suez. In Morocco, SDX has a 75% working interest in the Sebou
concession situated in the Rharb Basin. These producing assets are
characterised by exceptionally low operating costs 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 website of the Company
at www.sdxenergy.com or the Company's filed documents at
www.sedar.com.
For further information:
SDX Energy Inc.
Paul Welch
President and Chief Mark Reid
Executive Officer Chief Financial Officer
Tel: +44 203 219 5640 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
Cantor Fitzgerald Europe (Joint Broker)
David Porter/Nick Tulloch
Tel: +44 207 7894 7000
GMP FirstEnergy (Joint Broker)
Jonathan Wright/David van Erp
Tel: +44 207 448 0200
Celicourt (PR)
Mark Antelme/Jimmy Lea/Ollie Mills
Tel: +44 207 520 9261
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as such term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
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 timing of completion and testing of SD-4X, the connection of
SD-4X to existing infrastructure, the start-up of production at
South Disouq and Ibn Yunus, the natural gas potential of the South
Disouq license and the timing of and the Company's ability to
successfully design and implement the stimulation program and
retest the LMS-1 well in the Lalla Mimouna license all should 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; the sufficiency of budgeted capital expenditures
in carrying out planned activities; and the availability and cost
of labor and services.
All timing given in this announcement, unless stated otherwise
is indicative and while the Company endeavors 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; 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 reference SDX's Management's Discussion &
Analysis for the three months ended March 31, 2018, 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 disclosure in this news release constitute "anticipated
results" for the purposes of National Instrument 51-101 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 pay thickness, and hydrocarbon content
attributable to the resources of the Company. Such estimates have
been prepared by management of the Company 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.
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 Paul Welch,
President and Chief Executive Officer of SDX. Mr. Welch, who has
over 30 years of experience, is the qualified person as defined in
the London Stock Exchange's Guidance Note for Mining and Oil and
Gas companies. Mr. Welch holds a BS and MS in Petroleum Engineering
from the Colorado School of Mines in Golden, CO. USA and an MBA in
Finance from SMU in Dallas, TX USA and is a member of the Society
of Petroleum Engineers (SPE).
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
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