SDX Energy reaches milestone with SD-1X drilling

North Africa-focussed oil and gas company SDX Energy announced on Friday that drilling on the SD-1X well at its South Disouq concession in the Nile Delta area of Egypt had now reached its second target depth.

The AIM-traded firm said that, following the “significant” natural gas discovery in the upper Abu-Madi section, where the well encountered 65 feet of net pay section with an average porosity of 25%, drilling continued with the SD-1X well which was subsequently targeting oil from the deeper Cretaceous horizons.

It said the well had now been drilled to a total depth of 11,068 feet.

Hydrocarbons were present in the deeper intervals, which the board said indicated a working petroleum system within the section.

Additionally, the well confirmed both the presence and quality of the reservoir intervals within this section.

However, there was not a sufficient amount of hydrocarbons present to justify completing the interval, SDX added.

The well would now be completed in the Abu-Madi, after which the rig will be released.

A detailed testing programme would be undertaken after the rig had been moved off location.

SDX said the well had provided “important new information” about the Cretaceous horizons in this area, which would allow the company and its partners to further explore its potential within the large 1,275 square kilometre South Disouq concession.

“Whilst it is disappointing not to have made a second commercial discovery in SD-1X's deeper target, evidence of a working petroleum system within this interval is extremely important to the prospectivity of the concession,” said president and CEO Paul Welch.

“The Cretaceous units are laterally extensive within the block and we have already identified several locations where this potential can be further tested.

“Meanwhile, we have an excellent gas discovery in our primary target, the Abu-Madi, and view the well results as a very significant success.”

Welch explained that the company’s objectives were now to test that upper interval and then get the field developed and on production in the shortest possible time frame.

“We are excited about this discovery, which adds a new asset to SDX's growing portfolio.

“Success here, combined with the extension of several of our permits in Morocco, where further drilling will take place later this year, puts us in a strong position to grow our production base in the near term.

“We remain firmly on track to deliver additional shareholder value in 2017 and beyond.”

As it had previously announced, SDX would provide further updates on the Abu-Madi section gas discovery, and associated recoverable volume estimates, in due course.