Oil & Gas

SDX Energy provides update on Egypt operations

SDXSDX Energy, the North Africa focused oil and gas company, has provided a 2018 operational outlook statement prior to Tuesday’s site visit for sell-side and industry analysts in Morocco.

Egypt – Meseda Concession (50% Working Interest/19.25% Economic Interest)

  • 2018 gross production guidance is increased to 3,800bopd.
  • SDX plans to drill four wells in 2018. Two wells to develop the Rabul discoveries (Rabul-3 and Rabul-4) and two wells to maintain production in the wider Meseda area (Infill Producer-1 and Infill Producer-2).
  • The Company also aims to replace up to five ESPs in the wider Meseda area.
  • Gross Meseda capex in 2018 is expected to be approx. US$6.0 million (SDX 50% share).

Egypt – North West Gemsa Concession (50% Working Interest)

  • SDX intends to maintain gross 2018 production at 2017 levels, targeting 4,422boepd.
  • To achieve this production it is planned to drill two wells (AASE-25 and AASE-27), and undertake seven well workovers.
  • The expected gross cost of the two wells including processing facility tie-ins is US$6.6 million with the seven workovers expected to cost gross US$1.7 million (SDX 50% share).

Egypt – South Disouq Concession (55% Working Interest)

  • Up to four wells planned in H1 2018 with estimated gross capex of approx. US$12.0 million (SDX share 55%).
    • Two exploration wells (Ibn Yunus-1X and Kelvin-1X)
    • Two development wells (SD-4X and SD-3X).
  • Upon success of SD-4X and SD-3X, SDX expects to complete construction of a 10km pipeline to the regional gas grid, together with the SD-1X processing facility. Gross capex is estimated at approx. US$15.0 million, subject to completion of tenders (SDX share 55%).
  • Ibn Yunus-1X and Kelvin-1X are targeting up to 150bcf in separate structures from the SD1X discovery. If successful, volumes will be tied back to the SD-1X processing facility and flow through the 10km pipeline directly to the regional gas grid.
  • Given the above, and assuming all necessary approvals are obtained, first gas is targeted mid-2018, with approx. 50mmscf/d expected from three wells in the SD-1X discovery structure. The gas price is still under negotiation.
  • Annual gross opex, including processing facility rental cost, is predominantly fixed and estimated at approx. US$6.0 million, subject to completion of tenders (SDX share 55%).

Cash and Working Capital

Q4 2017 Highlights

  • Recovered approx. US$6 million from backdated Egyptian and Moroccan receivables.
  • Paid approximately US$5 million of Moroccan drilling campaign costs.
  • Reduced backdated payables by approx. US$6 million.

2018 Outlook

  • In 2018, the Company will look to make further reductions in its backdated Egyptian receivables balance.
  • Commitment well in South Ramadan offshore concession (SDX share 12.75%) expected to be drilled in 2018. SDX’s share of the cost expected to be approx. US$3 million.

Paul Welch, President and CEO of SDX, commented:

‘We are pleased to provide an update on our extensive activity across our assets in both Morocco and Egypt, and welcome the opportunity to showcase our Moroccan operations to a number of analysts. The team at SDX is working hard to deliver on our stated strategy of creating value through the development of our portfolio.’

(SDX Energy Press Release)

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