SDX Energy begins gas production at Egyptian concession. Credit: AirBeagle.

UK-based oil and gas company SDX Energy has started production at its South Disouq concession in the Nile Delta area of Egypt.

The company noted that each of the site’s four discovery wells has been tested and gas has been flowing since last week.

These wells have produced an estimated rate of gas between 8MMscf/d and 15MMscf/d.

SDX said that initial flow rates were in line with expectations, achieving 23MMscf/d of gas and 120bbl/d of condensate.

It will gradually increase production to achieve its targeted plateau production rate of 50MMscfe/d in the first quarter of next year.

All gas production at the site, in which SDX owns a 55% interest, will be sold to Egypt’s national gas company Egas for $2.85/Mcf.

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SDX CEO Mark Reid said: “We would like to express our gratitude to EGAS and the Egyptian State for their continued support and to our main contractors, Petrojet and Expro, for their work in helping us achieve this important milestone.

“The wells will continue to be produced and tested and we will gradually ramp up production with a view to achieving our target production plateau rate of 50MMscfe/d during Q1 2020.

“South Disouq’s production, which is coming on stream in line with our previous guidance, will result in a material increase to the company’s cash flows going forward. We look forward to providing the market with further updates in due course.”

In June 2018, SDX Energy made a new gas discovery at SD-4X well and spudded the Ibn Yunus-1X exploration well in March 2018, both located in the South Disouq Concession.