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January 28, 2020

SDX Energy Morocco well beats pre-drill estimates

UK-headquartered, North Africa-focussed oil and gas company exploration and production company SDX Energy has encountered commercial quantities of gas in its OYF-2 well in Morocco. The quantities discovered exceed the company’s pre-drill estimates and confirm that the company’s core productive area extends to the north according to a statement the company released today.

By Jessica Paige

UK-headquartered, North Africa-focussed oil and gas company exploration and production company SDX Energy has encountered commercial quantities of gas in its OYF-2 well in Morocco. The quantities discovered exceed the company’s pre-drill estimates and confirm that the company’s core productive area extends to the north according to a statement the company released today.

The well, in which the company has 75% working interest, was drilled down to a depth of 1,210m where both the upper and lower Guebbas targets were encountered. Reservoir thickness and quality are of a better quality than the company had expected. The statement said that the upper Guebbas was encountered at a measured depth of 1,001m and the lower Guebbas at 1,120m.

SDX estimates that between 1.3 and 1.9 billion cubic feet (bcf) of gas is recoverable in the horizons encountered by OYF-2 and that the result opens up approximately 0.5 to 1.0bcf of “prospective resources in the western compartment of the Lower Guebbas target, which the company expects to recover with a single development well in the future”. The OYF-2 well will be tested in February and, depending on results, tied into the company’s infrastructure at an estimated cost of $2m.

The rig has now moved to SDX’s BMK-1 location, 11km north of OYF-2. The new location will re-test the northern expansion of SDX’s core productive area and will de-risk a number of close-by prospects if successful. Following BMK-1, the company plans to drill one more close-to-infrastructure well in Lalla Mimouna, completing the company’s 12-well drilling campaign in March.

SDX CEO Mark Reid said: “We have a particularly busy year ahead with the drill bit, giving us the opportunity to significantly increase the Company’s reserves life. OYF-2 in Morocco is a very positive start, a discovery which is larger than pre-drill expectations, and confirmation that our core productive area extends to the north. With the planned follow-on development well, we now have the potential to increase our total reserves in Morocco to approximately three to four years of customer demand, with our gas being sold under five and ten year fixed priced contracts at an average gas price of circa $11/mcf.”

SDX also noted that it is preparing to drill two new exploration wells in South Disouq, Egypt, which the company has 55% working interest in. The first well, Salah, is expected to be completed in April 2020 and the second, Sobhi, in early June. A new appraisal/developmental well in West Gharib is also planned to spud in early February.

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Reid said: “With the imminent commencement of drilling campaigns in South Disouq and West Gharib in Egypt, together with the ongoing drilling campaign in Morocco, we have a very busy period of activity ahead of us with three rigs drilling simultaneously. I look forward to providing further updates on these campaigns in due course.”

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