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(Alliance News) - SDX Energy PLC on Wednesday said it encountered commercial gas in Morocco for both target horizons but well SD-6X in Egypt was not commercially viable.
Oil & gas firm SDX, which focuses on the middle east and north Africa, said the play-opening BMK-1 well in Morocco was drilled to a depth of 1,551 metres and encountered commercial gas quantities in both target areas.
Given this, and based on 3D seismic data, SDX opened a new play fairway and de-risked up to 20 billion cubic feet of near-by prospective resources for future drilling, with 10 billion cubic feet located in or near BMK-1.
SDX said it estimates BMK-1 encountered 900 million cubic feet of gas in the Upper and Lower Guebbas targets, meeting pre-drill estimates. However, because of "down-hole issues", only the Upper Guebbas target could be wireline logged and will complete.
The Lower Guebbas target, meanwhile, has an estimated 400 million cubic feet of gas recoverable, and "the gas in the Lower target will be recoverable during the development of the new play fairway de-risked by the OYF-2 and BMK-1 wells".
The drill rig used for BMK-1 will now move to the Lalla Monouna concession, also in Morocco, in order to drill the LMS-2 well.
In a more negative news, the SD-6X well at South Disouq in Egypt, where SDX holds a 55% interest and is operator, was drilled to 3,167 metres and encountered "sub-economic" levels of gas in two formations and low gas saturation in a third.
"The thinner than expected gas columns in SD-6X encountered is attributable to the absence of a sealing mechanism in the stratigraphic traps being targeted by the well. The well results are currently being analysed," SDX explained.
The rig which drilled SD-6X will move to drill another South Disqouq location, well SD-12X, which should spud in the next two or three weeks and is targeting around 33 billion cubic feet equivalent of gas. The SD-6X result "is not anticipated to have any technical read across to SD-12X".
Chief Executive Mark Reid said: "The BMK-1 result in Morocco is excellent news, confirming that together with the OYF-2 discovery in January, we can now plan to develop a material and valuable new prospective area to the north of our existing infrastructure in a market where we are the only gas producer and where we receive gas prices of between USD10-12 per [million cubic feet]. An additional 20 billion cubic feet of P50 prospective resources has the potential to significantly extend reserve life and support lower CO2 emissions at our customers.
"After the SD-6X well in Egypt, we can look forward to spudding the SD-12X well in the weeks ahead, where there is no expected technical read across from SD-6X."
Shares in SDX Energy were flat at 18.50 pence in London in afternoon trading.
By Anna Farley; annafarley@alliancenews.com
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