TIDMSDX
RNS Number : 5335L
SDX Energy Inc.
20 April 2018
THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY
SDX TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET
ABUSE REGULATION (EU) NO. 596/2014 ("MAR"). ON THE PUBLICATION OF
THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE ("RIS"),
THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC
DOMAIN.
20 April 2018
SDX ENERGY INC.
("SDX" or the "Company")
Gas discovery at LNB-1 well, Morocco
Play opening discovery in the Lafkerena (Deep), secondary
discovery in the Dlalha (shallow)
SDX Energy Inc. (TSXV, AIM: SDX), the North Africa focused oil
and gas company, is pleased to announce that a conventional natural
gas discovery has been made at its LNB-1 exploration well on the
Lalla Mimouna permit in Morocco (SDX 75 %).
The LNB-1 well was drilled to a total depth of 1861 meters. The
primary target was in the Lafkerena sequence, where 300 meters of
gas bearing horizons were encountered in a significantly
over-pressured section. The mudlog obtained through the section
showed elevated gas readings of more than 20% with multiple
sections above 50%. This section could not be logged using
conventional methods due to hole conditions.
The gas shows in this section contained heavier hydrocarbon
components throughout, which is indicative of a thermogenic
hydrocarbon source rock. These types of shows have not been seen to
date in other parts of the basin and indicate that a new petroleum
system has been encountered in this area. Based on the mudlog
shows, reservoir quality information from the formation cuttings,
analogue fields (outside the Gharb basin), and the size of the
feature as currently mapped, a preliminary recoverable gas volume
has been estimated by management. This results in an un-risked
mid-case volume of 10.2 Bscf of conventional natural gas and 55
thousand barrels of condensate. This is significantly larger than
the traps typically encountered in Sebou and would exceed the size
required to justify development and connection to the existing
infrastructure in the Sebou area.
Additionally in the secondary target, the Upper Dlalha, 2.6
meters of net conventional natural gas pay sands were encountered
with average porosity in the pay section of 33%. This pay section
is similar to the Guebbas targets, from which SDX successfully
produces on the Sebou permit.
The well is now being completed as a conventional gas producer
in the Upper Dlalha with the deeper Lafkerena section being
suspended until the appropriate equipment can be mobilized, to test
and produce from this over-pressured section. The timetable to test
this section has not been finalized and will be the subject of a
future update.
The drilling rig will now move to the LMS-1 exploration well in
the Lalla Mimouna Nord permit, which will be the last well of the
current drilling campaign.
Paul Welch, President and CEO of SDX, commented:
"We are very excited about the results of this exploration well.
It was a higher risk exploration prospect than previous drilling in
Sebou, as it was a sequence that had not been previously penetrated
in a similar structural location. We had anticipated a
higher-pressure section, based upon offset drilling in the area,
but the actual pressures encountered, the thickness of the section,
and the type and amount of shows significantly exceeded our
expectations."
"We are currently in the early planning phases of determining
how best to complete and test this section. The estimated volume
potential is very encouraging and I look forward to updating the
market further on our activities in due course. Meanwhile, we have
one more exploration well to drill on the permit in this campaign
and I am looking forward to some more positive results based upon
our success in LNB-1."
About SDX
SDX is an international oil and gas exploration, production and
development company, headquartered in London, England, UK, with a
principal focus on North Africa. In Egypt, SDX has a working
interest in two producing assets (50% North West Gemsa & 50%
Meseda) located onshore in the Eastern Desert, adjacent to the Gulf
of Suez. In Morocco, SDX has a 75% working interest in the Sebou
concession situated in the Rharb Basin. These producing assets are
characterised by exceptionally low operating costs making them
particularly resilient in a low oil price environment. SDX's
portfolio also includes high impact exploration opportunities in
both Egypt and Morocco.
For further information, please see the website of the Company
at www.sdxenergy.com or the Company's filed documents at
www.sedar.com.
For further information:
SDX Energy Inc.
Paul Welch
President and Chief Mark Reid
Executive Officer Chief Financial Officer
Tel: +44 203 219 5640 Tel: +44 203 219 5640
Stifel Nicolaus Europe Limited (Nominated
Adviser and Joint Broker)
Callum Stewart
Nicholas Rhodes
Ashton Clanfield
Tel: +44 (0) 20 7710 7600
Cantor Fitzgerald Europe (Joint Broker)
David Porter/Nick Tulloch
Tel: +44 207 7894 7000
GMP FirstEnergy (Joint Broker)
Jonathan Wright/David van Erp
Tel: +44 207 448 0200
Celicourt (PR)
Mark Antelme/Jimmy Lea/Ollie Mills
Tel: +44 207 520 9261
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as such term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Forward--Looking Information
Certain statements contained in this press release may
constitute "forward--looking information" as such term is used in
applicable Canadian securities laws. Any statements that express or
involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future
events or are not statements of historical fact should be viewed as
forward-looking information. In particular, statements regarding
the completion, testing and production of the LNB-1 well and the
potential volume at the Lalla Mimouna permit should all be regarded
as forward-looking information.
The forward-looking information contained in this document is
based on certain assumptions and although management considers
these assumptions to be reasonable based on information currently
available to them, undue reliance should not be placed on the
forward-looking information because SDX can give no assurances that
they may prove to be correct. This includes, but is not limited to,
assumptions related to, among other things, commodity prices and
interest and foreign exchange rates; planned synergies, capital
efficiencies and cost--savings; applicable tax laws; future
production rates; the sufficiency of budgeted capital expenditures
in carrying out planned activities; and the availability and cost
of labor and services.
All timing given in this announcement, unless stated otherwise
is indicative and while the Company endeavors to provide accurate
timing to the market, it cautions that due to the nature of its
operations and reliance on third parties this is subject to change
often at little or no notice. If there is a delay or change to any
of the timings indicated in this announcement, the Company shall
update the market without delay.
Forward-looking information is subject to certain risks and
uncertainties (both general and specific) that could cause actual
events or outcomes to differ materially from those anticipated or
implied by such forward--looking statements. Such risks and other
factors include, but are not limited to political, social and other
risks inherent in daily operations for the Company, risks
associated with the industries in which the Company operates, such
as: operational risks; delays or changes in plans with respect to
growth projects or capital expenditures; costs and expenses;
health, safety and environmental risks; commodity price, interest
rate and exchange rate fluctuations; environmental risks;
competition; ability to access sufficient capital from internal and
external sources; and changes in legislation, including but not
limited to tax laws and environmental regulations. Readers are
cautioned that the foregoing list of risk factors is not exhaustive
and are advised to reference SDX's Management's Discussion &
Analysis for the three and twelve months ended December 31, 2017,
which can be found on SDX's SEDAR profile at www.sedar.com, for a
description of additional risks and uncertainties associated with
SDX's business, including its exploration activities.
The forward--looking information contained in this press release
is as of the date hereof and SDX does not undertake any obligation
to update publicly or to revise any of the included
forward--looking information, except as required by applicable law.
The forward--looking information contained herein is expressly
qualified by this cautionary statement.
Oil and Gas Advisory
Certain disclosure in this news release constitute "anticipated
results" for the purposes of National Instrument 51-101 of the
Canadian Securities Administrators because the disclosure in
question may, in the opinion of a reasonable person, indicate the
potential value or quantities of resources in respect of the
Company's resources or a portion of its resources. Without
limitation, the anticipated results disclosed in this news release
include estimates of volume, pay thickness and hydrocarbon content
attributable to the resources of the Company. Such estimates have
been prepared by management of the Company and have not been
prepared or reviewed by an independent qualified reserves evaluator
or auditor. Anticipated results are subject to certain risks and
uncertainties, including those described above and various
geological, technical, operational, engineering, commercial and
technical risks. In addition, the geotechnical analysis and
engineering to be conducted in respect of such resources is not
complete. Such risks and uncertainties may cause the anticipated
results disclosed herein to be inaccurate. Actual results may vary,
perhaps materially.
In addition to the uncertainties listed above due the level of
information available there is still uncertainty associated with
the volume estimate prepared by management. Some of the risk and
uncertainties are outlined below:
-- Petrophysical parameters of the sand/reservoir
-- Fluid composition, especially heavy end hydrocarbons
-- Accurate estimation of reservoir conditions (pressure and
temperature), currently unknown but roughly estimated based on
range of 1.6-1.65 SG
-- Reservoir drive mechanism
-- Potential well deliverability
-- The thickness and quality of the reservoir section away from the current location.
Competent Persons Statement
In accordance with the guidelines of the AIM Market of the
London Stock Exchange the technical information contained in the
announcement has been reviewed and approved by Paul Welch,
President and Chief Executive Officer of SDX. Mr. Welch, who has
over 30 years of experience, is the qualified person as defined in
the London Stock Exchange's Guidance Note for Mining and Oil and
Gas companies. Mr. Welch holds a BS and MS in Petroleum Engineering
from the Colorado School of Mines in Golden, CO. USA and an MBA in
Finance from SMU in Dallas, TX USA and is a member of the Society
of Petroleum Engineers (SPE).
Glossary
Bscf billions of standard cubic feet
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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