SDX's Morocco Well Encounters Gas
Middle East and North Africa-focused SDX Energy’s LMS-2 well in Morocco has encountered a gas reservoir, it said March 19.
The well was drilled to a depth of 1,190 metres and encountered a 10.6 metres of net gas reservoir at the base of the H9/Srafen formation, the company said. “Unlike previous gas discoveries in the south of the acreage, analyses while drilling indicated that the different thermogenic composition of the gas suggests that it is from a new and likely deeper source rock,” it added.
The well has been cased and completed and will be perforated and tested to determine its potential when changes to Covid-19 restrictions make it possible to bring a well testing crew into the country.
"We are encouraged with the initial results at LMS-2 in Morocco, however, we require this well to be perforated and tested before we can understand its potential,” CEO Mark Reid said.
In Egypt, the company has started drilling at the SD-12X (Sohbi) well at South Disouq. Sohbi is expected to reach its targeted depth of approximately 2,300 metres in late April and is targeting 33bn ft3 in prospective resources. If successful, the Sohbi well would be tied back during 2021 to the Ibn Yunus-1X location 5.8 km away, where an existing flowline connects to the South Disouq central processing facility.
“Sohbi is an exciting well for the company, targeting the same productive formation we are already producing from in Egypt and if successful, it has the potential to extend the current plateau production of 50mn ft3/d to 2024,” Reid said.
He said that the company remains well funded with $11mn of cash as of December 31, 2019 and $7.5mn of debt available in its EBRD credit facility.
“Furthermore, even at an oil price assumption of $55/b, approximately 80% of 2020 and 90% of 2021 forecast cash flows are estimated to come from our fixed price gas businesses in Egypt and Morocco,” Reid said.