SPUDDING OF MSD-24 WELL
18 May 2022
SDX ENERGY PLC ("SDX", the "Company" or the "Group")
SPUDDING OF MSD-24 WELL AT WEST GHARIB CONCESSION EGYPT
SDX Energy Plc (AIM: SDX), the MENA-focused energy company, is pleased to announce the spudding of the MSD-24 infill development well on the Meseda field. This well is the fourth in a fully funded 13-well development drilling campaign on the Meseda and Rabul oil fields in the West Gharib concession in the Egyptian Eastern Desert. The campaign is aimed at growing production to c.3,500 - 4,000bbl/d by early 2023.
The MSD-24 infill development well on the Meseda Field (SDX: 50% working interest) spud on 15 May 2022 and is targeting the Asl Formation reservoir at approximately 3,300ft TVDSS. It is estimated that the well will take around six weeks to drill, complete and tie-in to the existing infrastructure. MSD-24, with an expected cost to drill and tie in of US$0.9-US$1.0 million (gross), is anticipated to come on-line and produce at around 300bbl/d (gross), which would immediately contribute to Group cashflow and result in a payback period of five to six months at current oil prices. The Company expects to update the market on its result in mid-June.
The first two wells in the campaign, MSD-21 and MSD-25, have been successfully tied-in and are contributing to production. Operations at the MSD-20 well have been slower than expected due to the performance of the rig that was being used on this well. This rig has now been permanently replaced and the Company is confident of improved and accelerated performance in the campaign going forward. It is hoped that results from MSD-20 will be available in the next three to four weeks.
Mark Reid, CEO of SDX, commented:
"I am pleased that we have spud MSD-24, the fourth well in the campaign and that we will now be drilling simultaneously with two good quality rigs. West Gharib is a very high margin asset in our portfolio with a Netback of US$37/bbl at US$71/bbl Brent in FY2021. Now that we have a second rig in operation, the 13-well campaign can be accelerated to allow us to take advantage of the current high oil price. I look forward to updating the market further as the campaign progresses."
About SDX
SDX is an international oil and gas exploration, production, and development company, headquartered in London, United Kingdom, with a principal focus on MENA. In Egypt, SDX has a working interest in two producing assets: a 36.9% operated interest in the South Disouq and Ibn Yunus gas fields and a 67.0% operated interest in the Ibn Yunus North gas field in the Nile Delta and a 50% non-operated interest in the West Gharib concession, which is located onshore in the Eastern Desert, adjacent to the Gulf of Suez. In Morocco, SDX has a 75% working interest in four development/production concessions, all situated in the Gharb Basin. The producing assets in Morocco are characterised by attractive gas prices and exceptionally low operating costs. SDX has a strong weighting of fixed price gas assets in its portfolio with low operating costs and attractive margins throughout, providing resilience in a low commodity price environment. SDX's portfolio also includes high impact exploration opportunities in both Egypt and Morocco.
For further information, please see the Company's website at www.sdxenergygroup.com or the Company's filed documents at www.sedar.com .
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 Dr Rob Cook, VP Subsurface of SDX. Dr. Cook has 30 years of oil and gas industry experience and is the qualified person as defined in the London Stock Exchange's Guidance Note for Mining and Oil and Gas companies. Dr. Cook holds a BSc in Geochemistry and a PhD in Sedimentology from the University of Reading, UK. He is a Chartered Geologist with the Geological Society of London (Geol Soc) and a Certified Professional Geologist (CPG-11983) with the American Institute of Professional Geologists (AIPG).
For further information:
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SDX Energy Plc Mark Reid Chief Executive Officer Tel: +44 203 219 5640
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Stifel Nicolaus Europe Limited (Nominated Adviser and Broker) Callum Stewart Jason Grossman Ashton Clanfield Tel: +44 (0) 20 7710 7600 |
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Camarco (PR) Billy Clegg Owen Roberts Violet Wilson Tel: +44 (0) 203 757 4980
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Glossary
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"bbl" |
Barrel |
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"bbl/d" |
Barrels per day |
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"TVDSS" |
True vertical depth sub-sea |
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 future production and cashflows from the West Gharib drilling campaign; the Company's future drilling activities, costs and results; and management's intention to provide further updates to the market 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; receipt of necessary permits; the sufficiency of budgeted capital expenditures in carrying out planned activities, and the availability and cost of labour and services.
All timing given in this announcement, unless stated otherwise, is indicative, and while the Company endeavours 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; permitting risks; the 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 refer to the Principal Risks & Uncertainties section of SDX's Annual Report for the year ended 31 December 2021, 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.
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.
Non-IFRS Measures
This news release contains the term "Netback", which is not a recognized measure under IFRS and may not be comparable to similar measures presented by other issuers. The Company uses this measure to help evaluate its performance.
Netback is a non-IFRS measure that represents sales net of all operating expenses and government royalties. Management believes that Netback is a useful supplemental measure to analyze operating performance and provide an indication of the results generated by the Company's principal business activities prior to the consideration of other income and expenses. Management considers Netback an important measure as it demonstrates the Company's profitability relative to current commodity prices. Netback may not be comparable to similar measures used by other companies.
Oil and Gas Advisory
Certain disclosures in this news release constitute "anticipated results" for the purposes of National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 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 volume, flow rate, production rates, porosity, and pay thickness attributable to the resources of the Company. Such estimates have been prepared by Company management 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.
This RNS does not include inside information.
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