SDX Energy Plc (AIM: SDX), the MENA-focused oil and gas company, is pleased to announce that upon completion of an independent technical and economic audit of the reserves at its operated South Disouq concession (SDX: 55% working interest), Gaffney, Cline & Associates (GCA) has reported that gross proved plus probable reserves ("2P reserves"), as at 30 September 2019, are 86 BCF of natural gas and 0.6 MMbbl of condensate. This is equivalent to gross 89 BCFE and represents an increase of 35% from gross 66 BCFE as included in the Company's reserves audit covering all of its concessions as at 31 December 2018. Both reports are available on the Company's website.
The increase in South Disouq 2P reserves is as a result of the 2019 reprocessed 3D seismic data providing a better understanding of the structure and distribution of the reservoir around the production wells.
Gas has been flowing through the South Disouq Central Processing Facility ("CPF") since 7 November 2019 with all four production wells and the CPF performing as expected. The Company has been producing at a gross stabilised rate of approximately 50 MMcfe/d since 10 December 2019 which was approximately three months ahead of expectations.
All gas production is 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%.
GCA is an independent qualified reserves auditor and the South Disouq reserves audit as at 30 September 2019 was performed in accordance with the Canadian Oil and Gas Evaluation Handbook (as those terms are defined in National Instrument 51-101- Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators) and the Society of Petroleum Engineers' Petroleum Resources Management System.
Mark Reid, CEO of SDX, commented:
"We are pleased to announce that our 2P reserves at South Disouq have increased by 35% to gross 89 BCFE and that the wells and CPF continue to produce at a stabilised rate of approximately 50 MMscfe/d. We are now looking forward to the commencement of our South Disouq drilling campaign in February when we will be spudding the first of two wells targeting the same horizons encountered in our four discoveries to date. If successful, these wells have the potential to significantly increase our existing reserves and can be quickly tied into the South Disouq CPF. Depending on partnering discussions, a third well targeting deeper prospectivity in a potential new play fairway, may be drilled later in 2020."