SDX Energy upbeat on Egyptian concessions

North Africa focused oil and gas company SDX Energy provided an operational update on its South Disouq and Meseda concessions in Egypt on Monday.

The AIM-traded firm had previously announced on 10 October that SDX's initial assessment of the 3D seismic data at South Disouq was positive and identified potential for both oil and gas bearing prospects.

It said on Monday that further interpretation of the data has now indicated several Abu Madi and Kafr El Sheikh prospects displaying strong Class III amplitude versus offset responses.

Testing of similar responses in offset areas has resulted in numerous discoveries at these stratigraphic levels, the board explained.

The responses have allowed SDX to high grade several prospects for drilling in the near term.

SDX said the positive AVO responses further de-risk the prospectivity in the area, allowing the company and its partners to achieve the intended goal of the 3D seismic acquisition program.

The company operates with a 55% equity interest on the concession, and it has agreed with its partner the target and location for drilling the carried exploration well, identified during the interpretation of data.

It said the permitting process has commenced and a team has been engaged to provide technical assistance on the well, with drilling set to commence by early Q1 2017.

“Subsequent to the announcement on 10 October, the company can confirm that it has received enquiries from a number of operators regarding farming in to the licence,” the board said in a statement.

“Although the company is fully carried on its remaining obligations in the license and is unlikely to farm down any additional equity, it has agreed to let selected companies submit proposals to acquire an interest in the concession.

“These discussions are ongoing and SDX will update the market as appropriate.”

At Meseda, SDX said it has completed the final design work on the electrical submersible pump program, which it undertook after conclusion of its field review in May.

The company said it is now finalising its technical review of the Meseda facility after which it will procure equipment necessary to double the treating capacity of the central production facility, enabling it to significantly raise net production from the concession.

“Today's announcement demonstrates solid operational progress and momentum for SDX,” said CEO Paul Welch.

“The update on South Disouq marks an important step for the company, as we move out of the analysis phase of our work programme and into drilling phase.

“At Meseda, we are excited to have the majority of the technical work completed and look forward to moving into the implementation phase in the near term in order to maximise the field's full potential.”