Successful equity issue to finance fast-track development and fresh exploration wells at Nile Delta find onshore Egypt.
SDX Energy aims to drill two further exploration wells near its South Disouq discovery onshore Egypt where it is now targeting first gas in the first quarter of 2018 after raising cash in a successful equity issue.
The London-listed company has generated $10 million from the private placement with institutional investors that was oversubscribed and intends to use the proceeds to step on the gas for a fast-track development of the Nile Delta find.
SDX said this means it is fully funded to complete all development activities necessary to bring the field online early next year after a successful flow test of the SD-1X discovery well in the South Disouq concession, which it operates with a 55% stale.
In addition, the cash will be used to drill wells at the Kelvin and Bragg prospects in the permit as offsets to the discovery well, with the pair estimated to hold as much as 150 billion cubic feet in prospective resources.
“Potential exists for the Kelvin prospect and the existing South Disouq discovery to be confirmed as one large structure as they appear to have a continuous gas-bearing section connecting them,” SDX said in a statement.
The two exploration probes, costing $2.5 million apiece, are expected to be drilled in the first quarter of next year as part of a four-well effort also including two development wells at South Disouq that SDX said “will help to reduce overall well costs of the programme and may facilitate securing a larger producing concession”.
“The wells will allow SDX to optimise the gas processing facility size at South Disouq, while accelerating production and development of the concessions identified,” the company added.
Meanwhile, SDX also intends to use proceeds from the offering to accelerate development of its Moroccan acreage, with two additional development wells lined up for drilling on the Gharb Centre and Sebou permits targeting a total of 1.91 Bcf.
“The wells will be drilled close to existing infrastructure, allowing for quick tie-in, reserves realisation, production start-up and incremental cash-flow generation,” it stated.
The new probes, costing $2.5 million each, will increase SDX’s drilling effort in the North African country to seven development and two exploration wells as it targets a 50% sales volume increase in the domestic market over the next two to three years.
(Source: Upstream Online)