AIM-listed player to relinquish South Ramadan asset as it concentrates efforts on South Disouq development.
SDX Energy is letting go of an offshore asset in Egypt as the UK-based player looks to concentrate capital in the country on a fast-track gas development in the north.
The AIM-listed company held talks this week with its partners in the South Ramadan concession in the Gulf of Suez over the next steps for the shallow-water tract, but chief executive Paul Welch said it is looking to pull out.
SDX has a 12.75% stake in South Ramadan and is joined by state player General Petroleum Company and local technical operator Pico Cheiron Group.
“We have asked for a deferral on the well commitment, which we believe we have received,” Welch told Upstream this week, speaking from Cairo where he travelled to talk with the partners on the way forward for the concession.
“We don’t intend to put any (more) capital into it,” Welch said, describing South Ramadan as “a very-high cost, low-potential permit at the moment”.
“It is a legacy asset from the old Sea Dragon days that we didn’t get a chance to get rid of,” Welch said of SDX legacy company Sea Dragon Energy.
“It is not an attractive asset for us but it is still something that we have a commitment to, but ideally we would shift that commitment to another part of our acreage in Egypt.”
Egypt is the company’s main focus and it is aiming to press ahead with a fast-track development at its South Disouq concession in the Nile Delta to the north, following the SD-1X gas discovery earlier this year.
The company is also planning to test the deeper oil-prone Cretaceous horizon at the field, where a working petroleum system was encountered.
SDX has put together a development plan, which it is discussing with the state, while Dallas-based partner IPR Group would also need to sign off on the scheme.
“In an ideal world we will drill two additional wells in the fourth quarter and then by the first quarter of 2018 we will have those two wells connected and that would give us a plateau rate of about 45 million to 50 million cubic feet per day,” Welch said.
Production start-up is still hoped for in the first quarter.
(Source: Upstream Online)