SDX Energy makes commercial discovery at Egypt’s Sobhi well

SDX Energy, the MENA-focused oil and gas company, said it Egypt well in the South Disouq exploration permit onshore Nile Delta struck high-quality bas-bearing sands.

The company’s best estimate is that the well has encountered approximately 24 (billion cubic feet equivalent (bcfe) of recoverable gas and condensate resources which is significantly in excess of the minimum commercial volume of approximately 8 bcfe, SDX said in a statement.

"This is an excellent result for SDX and fully justifies our confidence to drill this well on a sole risk basis,” Mark Reid, CEO of SDX said. “South Disouq represents our flagship asset and in the current economic climate this fixed price, low cost gas development is highly cash generative for the group. The Sobhi discovery has the potential to extend the current South Disouq plateau production of 50 MMscfe/d through to 2023/24 with a low-cost tie in, utilising the existing gas processing plant. We look forwarding to updating the market further following the testing of the well."

SDX has a 100 per cent working interest in the Sobhi well and a 55 per cent interest in South Disouq permit.

The well was drilled to a measured depth of 7,245 feet, encountering 108 feet net of high-quality gas-bearing sands, with an average porosity of 20 per cent, near the base of the Kafr El Sheikh (KES) formation, the company said, adding that the top of the KES sand was encountered at a measured depth of 6,506 feet.

The drilling rig is now completing the well and preparing for testing in the coming weeks.

SDX expects that the Sobhi well will be tied in during 2021 via a 5.8 kilometre tie-in to the Ibn Yunus-1X location where an existing flow-line connects to the South Disouq Central Processing Facility. On a gross basis, the tie-in cost is estimated at $3.5 million.

The discovered 24 bcfe of gross recoverable gas and condensate resources will potentially only require one further development well to be drilled, albeit this will not be necessary for another 2-3 years.  SDX drilled the Sobhi well at a 100 per cent working interest and the total cost of the well, including the cost to complete, is estimated at $3.7 million.