SDX Energy, the MENA-focused oil and gas company, said its proved and probable natural gas reserves at Egypt’s South Disouq operated concession have jumped by 35 per cent to 86 billion cubic feet (BCF) following a new independent technical audit.
Gaffney, Cline & Associates (GCA) in its audited report said that gross proved plus probable reserves (2P reserves), as at 30 September 2019, are 86 BCF of natural gas and 0.6 million barrels of condensate at the concession in which SDX has a 55 per cent working interest.
This is equivalent to gross 89 billion of cubic feet equivalent (BCFE) and represents an increase of 35 per cent from gross 66 BCFE as included in the company's reserves audit covering all of its concessions as at 31 December 2018.
“The increase in South Disouq 2P reserves is as a result of the 2019 reprocessed 3D seismic data providing a better understanding of the structure and distribution of the reservoir around the production wells,” the company said in a statement.
Gas has been flowing through the South Disouq Central Processing Facility (CPF) since November 7 2019 with all four production wells and the CPF performing as expected. The company has been producing at a gross stabilised rate of approximately 50 million cubic feet of gas equivalent (MMcfe) per day since 10 December 2019 which was approximately three months ahead of expectations.
Mark Reid, CEO of SDX, said: "We are now looking forward to the commencement of our South Disouq drilling campaign in February when we will be spudding the first of two wells targeting the same horizons encountered in our four discoveries to date. If successful, these wells have the potential to significantly increase our existing reserves and can be quickly tied into the South Disouq CPF. Depending on partnering discussions, a third well targeting deeper prospectivity in a potential new play fairway, may be drilled later in 2020."
All gas production is sold to the Egyptian national gas company, EGAS, at a fixed price of US$2.85/Mcf, with the Government of Egypt's entitlement share of gross production equating to approximately 51 per cent.