SDX Energy Share News (SDX)

(Sharecast News) - Middle East and North Africa-focussed SDX Energy announced the start of the South Disouq drilling campaign on Tuesday, to comprise two wells in the coming months.
The AIM-traded firm said the upcoming campaign would consist of one step-out development well and one exploration well in its operated South Disouq acreage in Egypt, where it holds a 55% working interest.

It said the first well, IY-2, which spud on 28 June, is a development well targeting the high-porosity and high-permeability Basal Kafr El Sheikh reservoir at about 6,600 feet in the Ibn Yunus field.

The well, which would take about one month to drill, could be rapidly tied into the existing infrastructure at the nearby IY-1X well, with production expected to start late in the third quarter.

It expected the well to maximise recovery from the Ibn Yunus Field, and help to maintain current gross production levels of about 45 million standard cubic feet equivalent per day at the South Disouq central processing facility.

The company said it would update the market on the result of this well in late July or early August.

It said the second well in the campaign, the HA-1X exploration well on the Hanut prospect, was expected to spud after the completion of IY-2 in early August.

HA-1X, which was targeting gross unrisked mean recoverable volumes of 139 billion cubic feet with a 33% chance of success, was also expected to take around one month to drill, with the firm planning to update the market on its result in mid-September.

"After our previous highly successful campaigns at South Disouq where we have achieved five discoveries from seven wells drilled, I am excited to announce the commencement of our next phase of drilling," said chief executive officer Mark Reid.

"The IY-2 step-out development well was successfully spud and we anticipate that, upon completion, it will be rapidly tied into our existing infrastructure and begin production in the third quarter of 2021."

In addition, Reid said the planning for the "potentially transformational" HA-1X exploration well on the Hanut prospect was continuing, with spud expected in the third quarter.

"This gross 139 billion cubic feet prospective target, which has a 33% chance of success, has the potential to significantly transform the resource profile of the company, and we look forward to updating the market further as the well progresses."

At 1137 BST, shares in SDX Energy were up 2.63% at 16.01p.