SDX Energy Share News (SDX)

(Sharecast News) - Middle East and North Africa-focussed oil and gas company SDX Energy announced the start of a 12-well drilling campaign on Friday, targeting a mean 15 billion cubic feet of gross unrisked prospective resources, in its operated Gharb Basin acreage in Morocco, where it has a 75% working interest.
The AIM-traded firm said the first seven wells, located in its core producing concessions at Sebou and Gharb Centre, would be lower-risk appraisal wells targeting prospects which are close to existing infrastructure.

Those wells could be tied in quickly, at low cost, and were said to be similar in geological risk to the discoveries already made and producing in the area.

SDX said the seven appraisal wells would be followed by two step-out exploration wells further to the north in Gharb Centre, and outside the reach of its existing infrastructure.

Those two exploration wells would target prospects which are similar to the discoveries made in Sebou and Gharb Centre, although they were deemed to be higher risk as that part of the concession had not been previously tested.

Success there could open up the northern area of the concession for extensive follow-on drilling.

The last three wells of the campaign were expected to be higher-risk exploration wells in the Lalla Mimouna Nord concession, targeting larger prospects in deeper, as yet unproven, horizons.

In a bid to to optimise operations and reduce costs, SDX said it had secured an advanced North American rig to reduce drilling time.

Additionally, it said it would perforate and test successful wells in separate campaigns, with multiple wells tested back-to-back in each campaign to reduce equipment mobilisation costs.

The drilling campaign was expected to complete in the first quarter of 2020.

"The 12 wells have three key objectives - the first objective is to drill seven lower risk wells in our existing core producing area," said the company's chief financial officer and interim chief executive officer Mark Reid.

"These wells are close to existing infrastructure and will increase reserves for the continued supply of gas to our existing customers.

"Our second objective is to drill two step-out exploration wells to the north of our core production area which, if successful, would open up new, target-rich acreage for future drilling."

Reid said the final objective of the campaign was to test larger but higher-risk prospects in the Lalla Mimouna Nord concession.

"To do this, we plan to drill up to three wells, however, if the first well does not meet our expectations, we may move the rig back to our core producing area and complete the campaign by drilling two further lower-risk, but smaller, prospects to add additional reserves.

"We expect the campaign to complete in the first quarter of 2020 and we look forward to updating the market on progress in due course."