(Sharecast News) - Middle East and North Africa-focussed SDX Energy announced the start of oil production at the MSD-25 infill development well on the Meseda field on Thursday, in its West Gharib concession in Egypt, where it has a 50% working interest.
The AIM-traded firm MSD-25 encountered the primary top Asl Formation reservoir at a measured depth of 4,109 feet and reached a total depth of 4,385ft on 22 February, after drilling through 84.8 feet of "good quality net oil pay sandstone with an average porosity of 26.1%.
It said the well was successfully perforated, tied-in to the existing facilities, and flow tested, adding that it expected it to achieve a stabilised gross production rate of around 300 barrels per day post-clean up - in line with pre-drill estimates.
MSD-25 was the second well in a fully funded, up to 13-well development campaign at the Meseda and Rabul oil fields in the West Gharib concession of Egypt's Eastern Desert.
The campaign was aiming to grow gross production to between 3,500 and 4,000 barrels per day by early 2023.
SDX said the rig was now in the process of moving to the next well in the campaign, MSD-20, with spud expected in the next two to three weeks.
In order to take advantage of the high oil price, a second rig would also begin operations to drill the MSD-24 well and accelerate the development plan, with a spud date planned for mid-April.
SDX and its partner would assess the performance of the rigs over the coming months to determine how long both rigs would remain operational on the concession.
"We are pleased to get MSD-25 quickly and successfully connected to our infrastructure," said chief executive officer Mark Reid.
"Our 13-well development campaign at West Gharib, which we are now accelerating with the contracting of a second rig, provides a low-cost, highly beneficial exposure to the oil price which has generated a netback of $35 per barrel at $68 per barrel Brent in the first nine months of 2021.
"MSD-25 and the rest of the planned wells are expected to significantly boost the production and cash flow from these fields in the coming months and I look forward to updating the market further as the campaign progresses."
At 1548 GMT, shares in SDX Energy were up 2.8% at 8.43p.
SDX Energy (SDX)