SDX Energy: South Disouq Discovery Progresses
Edison | May 23, 2017 01:48AM ET
SDX Energy Inc (V:SDX) has released its first quarter 2017 results, the first period incorporating its recent acquisition of Egyptian and Moroccan assets. As expected, hydrocarbon sales rose significantly, totalling 2.991mboe/d and more than doubling year-on-year, while oil netbacks also increased markedly to $44.4/boe. During the period, the company successfully drilled the South Disouq well, proving a gas resource that could start production within 12 months. We leave our NAV unchanged at 76p/share, and await the results of testing the well in the coming weeks.
South Disouq discovery progresses
The South Disouq well intercepted 82ft of net pay with an average of 25% porosity and permeability above one Darcy. Condensate to gas ratios are estimated to be up to 70bbls/mmscf, above pre-drill estimates. The well will be tested in the coming month after the rig is moved off location. Furthermore, SDX Energy is already working on development planning and gas marketing to enable early gas production, which it hopes to commence in Q118. The company is preparing for a second exploration well, targeting deeper oil potential.
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