SDX Energy Plc (AIM: SDX), the MENA-focused oil and gas company, is pleased to announce the commencement of production from its operated South Disouq concession (SDX: 55% working interest) in Egypt.
Gas has been flowing through the South Disouq Central Processing Facility ("CPF") since 7th November 2019. Each of the four discovery wells have been hooked up to the CPF and tested during this period and have produced at their expected rates of between 8 MMscf/d and 15 MMscf/d.
Over the last three days, the CPF has been operating as expected, achieving an average gross production rate of 23 MMscf/d of gas and 120 bbls/d of condensate, equivalent to approximately 24 MMscfe/d. These initial flow rates are in line with the Company's expectations and testing will continue over the coming weeks, during which time the Company will gradually ramp up production with a view to achieving its targeted plateau gross production rate of 50 MMscfe/d during Q1 2020.
All gas production will be sold to the Egyptian national gas company, EGAS, at a fixed price of US$2.85/Mcf, with the Government of Egypt's entitlement share of gross production equating to approximately 51%.
Mark Reid, CEO of SDX, commented:
"The Company is pleased to announce the commencement of production at our South Disouq concession in Egypt. We would like to express our gratitude to EGAS and the Egyptian State for their continued support and to our main contractors, Petrojet and Expro, for their work in helping us achieve this important milestone. In addition, we are particularly grateful to Roger Wibrew and Amir Ezzat from SDX's Facilities team and to Mohamed Farid, SDX's Country Manager in Egypt, who have been integral in delivering this outcome for the Company.
The wells will continue to be produced and tested and we will gradually ramp up production with a view to achieving our target production plateau rate of 50 MMscfe/d during Q1 2020. South Disouq's production, which is coming on stream in line with our previous guidance, will result in a material increase to Company's cashflows going forward. We look forward to providing the market with further updates in due course."