SDX Energy is a MENA-focused, exploration and production company, listed on the AIM market of the London Stock Exchange. SDX has a balanced portfolio of production, development and exploration assets across Egypt and Morocco. 

The company's portfolio contains interests in 7 concessions in Egypt and Morocco. In Egypt, SDX has a working interest in two producing assets: a 55% operated interest in the South Disouq concession in the Nile Delta and a 50% non-operated interest in the Meseda concession located onshore in the Eastern Desert adjacent to the Gulf of Suez. In Morocco, SDX has a 75% operated working interest in five exploration permits, all situated in the Gharb Basin.

Average entitlement production for the 9 month period to 30 September 2020 was 6,488-6,598 boe/d, an increase of 85-89% from same period in 2019.

HISTORY

• 28 June 2006: Sea Dragon Energy Inc. was incorporated under the Canada Business Corporations Act (the “CBCA”) on March 28, 2006.
• 11 July 2008: Sea Dragon Energy listed on the TSX Venture Exchange under the symbol “SDX”
• 21 December 2009: Acquired 10% participating interest in the NW Gemsa Concession
• 16 November 2011: Meseda field brought into production
• 14 June 2012: As part of a consortium led by Dana Petroleum (KNOC), Madison signed a Production Sharing Contract for the Bakassi West Block, Cameroon
• 22 April 2013: Company awarded 100% participating interest in the South Disouq concession
• 31 December 2013: South Ramadan Concession acquired with Sea Dragon being a 12.75% equity owner
• 30 April 2014: South Disouq Concession awarded to Sea Dragon
• 28 February 2015: 45% Farm-Out completed for South Disouq Concession
• 19 August 2015: Sea Dragon Energy and Madison PetroGas announced merger
• 01 October 2015: Sea Dragon Energy and Madison PetroGas completed merger - combined company renamed SDX Energy
• 20 May 2016: SDX Energy listed on the London Stock Exchange AIM Market
• 14 June 2016: SDX Energy exited Bakassi West concession in Cameroon
• 27 January 2017: Acquired Circle Oil Assets in Egypt and Morocco
• 18 April 2017: Gas discovery at SD-1X well, South Disouq Concession, Egypt
• 05 October 2017: Oil discovery at Rabul 2 well
• 12 April 2018: Gas Discovery at Ibn Yunus-1X well, South Disouq Concession, Egypt
• 07 May 2018: Gas Discovery at LMS-1 well, Morocco
• 07 February 2019: SDX expands presence in Morocco: Moulay Bouchta Ouest and Lalla Mimouna Sud licenses awarded
• 28 May 2019: Completion of re-domiciliation transaction of SDX Group to the United Kingdom
• 26 June 2019: Oil discovery at Rabul-7 well, West Gharib Concession, Egypt
• 18 September 2019: Successful MSD-19 well at West Gharib Concession, Egypt
• 12 November 2019: Nicholas Box appointed to the position of CFO and Director of SDX
• 12 November 2019: Mark Reid appointed CEO of SDX
• 12 November 2019: Commencement of production at South Disouq and Ibn Yunus fields, Egypt
• 20 November 2019: Appointment of Amr Al Menhali as Non-Executive Director of SDX
• 28 January 2020: Gas discovery at OYF-2 well, Morocco
• 6 February 2020: Appointment of Catherine Stalker as independent Non-Executive Director
• 10 March 2020: Rabul-3 well oil discovery, West Gharib Concession, Egypt
• 19 March 2020: LMS-2 well gas discovery, Morocco
• 8 April 2020: Gas discovery at SD-12X well, South Disouq Concession, Egypt
• 13 July 2020: Sale of SDX's 50% interest in the North West Gemsa asset
• 19 July 2020: Disposal of SDX's 12.75% working interest in the South Ramadan asset

EGYPT

In Egypt, SDX has a working interest in three producing assets. In the South Disouq gas field in the Nile Delta, the Company is operator and has a 55% working interest. In the Eastern Desert, adjacent to the Gulf of Suez, the Company has two non-operated oil interests; 50% in North West Gemsa and 50% in Meseda.

Since becoming operator, the Company has made considerable progress at its South Disouq concession, located in the Nile Delta, where two gas fields were discovered. Firstly, in 2017 the South Disouq field was discovered by well SD-1X, which flowed tested at 26 MMscf/d from the Abu Madi Formation, and was followed in 2018 by appraisal wells SD-3X and SD-4X. Secondly, the 2018 Ibn Yunus-1X exploration well discovered gas in the basal Kafr El Sheikh Formation and was successfully flow tested at 39 MMscf/d.

The construction of a Central Processing Facility, a 10 km export pipeline and the tie-ins for the four existing production wells was completed in 2019, with first gas achieved, on time and on budget, in Q4 2019 at a gross plateau production rate of 50 MMscf/d, three months ahead of expectations.

Following this success, a two well exploration campaign commenced in Q1 2020, resulting in a discovery at the SD-12X Sobhi well, encountering 108 ft net of high-quality gas bearing sands. SDX estimates the discovery has added c.24 bcf (gross) of recoverable gas resource, meaning the Company can sustain production for longer at its flagship asset. Sobhi is expected to be tied in during 2020/2021 via a 5.8 km connection to the Ibn Yunus-1X location. SDX elected to drill the Sobhi well at a 100% working interest.

The West Gharib concession in Egypt contains the Meseda and Rabul fields, in which SDX holds a 50% non-operated working interest. The Company continues with the drilling of regular appraisal and development wells to maintain stable production. In Q1 2020, the RB-3 well was successfully drilled for completion as a producer. The Company expects it to add 300 bbl/d to the overall production of the asset. Two further development wells are planned for 2020/2021, which could add a further 600 bbl/d of production.

SDX plans 8 to 10 wells in the West Gharib concession between 2021 and 2023 for a gross cost of approximately US$8.0-10.0 million (SDX: US$4.0-5.0 million) with the potential to increase gross production from c.3,200 - 3,300 bbl/d to c.4,000 bbl/d by 2022.

South Disouq
In South Disouq (SDX 55% working interest and operator), the Company completed four wells during the year, three of which were conventional natural gas discoveries in the Abu Madi and Kafr el Sheik horizons.

The company has an operated 55% equity position after it completed a farm-out of the acreage to IPR in February of 2015 for the remaining 45%.

South Disouq two-well drilling campaign completed during 2020, with the second well, SD-12X (100% W.I.), being a commercial discovery in the Kafr el Sheikh ("KES") Formation, and management estimating 24 bcf of recoverable resources. Work is underway to connect SD-12X to the Company's gas processing plant via a 5.8km flow line to the Ibn Yunus-1X well location with production start-up expected in Q1 2021. Based upon well-test data, it is anticipated that when connected the well will produce at a stabilised rate of 10-12 MMscf/d.

Following the success of SD-12X at South Disouq and further review of the 3D seismic, management has now high-graded c.233bcf of mean unrisked recoverable volumes, which are; close to our existing infrastructure, located in horizons that are either productive in South Disouq or in adjacent blocks and which have now been high-graded to ready-to-drill prospects. This increase of 137bcf from the Company's previous estimates of c.96bcf is primarily attributable to the identification of the Hanut prospect which Company the estimates has an unrisked mean recoverable volumes of 139bcf.

Subject to receipt of final Ministerial and Parliamentary approval of the two-year extension to the South Disouq exploration area, which has already been approved by EGAS, the Company plans to accelerate its drilling campaign to Q2/Q3 2021 from late 2021/early 2022. The campaign will commence with the drilling of the two commitment wells proposed for the extension which will target c.165bcf in the Hanut and Mohsen prospects. The Company's 45% partner has still to confirm whether they will participate in the proposed extension.

Meseda
In Meseda (SDX 50% working interest and joint operator), an ESP replacement program was undertaken during the year and four development wells were successfully drilled and completed: Rabul-5, Rabul-4, MSD-16 and MSD-15.

The Meseda field is a 45km² concession situated onshore in the highly prospective West Gharib block, on the west side of the Gulf of Suez.

SDX Energy holds 50% working interest in the block, with Dublin International Petroleum holding the remaining operated 50% interest.

MOROCCO

SDX has a 75% operated working interest across the Moroccan portfolio, which includes the Sebou Central, Gharb Occidental, Lalla Mimouna Nord, Moulay Bouchta Ouest, and Lalla Mimouna Sud exploration permits, plus a number of exploitation concessions containing the producing wells. Sebou Central and Lalla Mimouna Nord were obtained as part of the Circle acquisition and Gharb Occidental was acquired directly from the Moroccan State in July 2017. SDX was awarded the remaining two permits in February 2019.  SDX sells the gas produced by its Moroccan assets to eight customers at contracted prices of between US$10-US$12/Mcf.

The 2019/20 Moroccan drilling campaign resulted in seven commercial discoveries from nine wells drilled, with the tenth well, LMS-2, completed and awaiting crew mobilisation for testing once COVID-19 restrictions are lifted. Discoveries at OYF-2 and BMK-1 confirm the prospectivity in SDX's existing core production and development area extends to the north, and have de-risked c.20 bcf of P50 prospective resources. 

Further analysis of the LMS-2 well results and a re-interpretation of the 3D seismic across SDX's concessions has revealed that structures similar to LMS-2 are present throughout the Company's acreage. This new prospectivity is located in horizons that are slightly deeper than the Company's core production and development area and the areas previously targeted in Lalla Mimouna. Work is ongoing to further define the scale of this prospectivity and, subject to a successful flow test of LMS-2, the intention is to target it as part of the planned 2021 Moroccan drilling campaign which we will also seek to accelerate into H1 2021.

LEADERSHIP/CONTACT

Doyle Michael, Non-Executive Chairman
Mark Reid, Chief Executive Officer and Director
Nicholas Box, Chief Financial Officer and Director
Mohamed Farid, Country Manager - Egypt
Lonny Baumgardner, Country Manager - Morocco

London – Registered/Head Office
38 Welbeck Street, London, W1G 8DP, United Kingdom

Tel: +44 (0) 203 219 5640

Morocco
Forum 6, Rue Ibrahim Tadili, Bureau n 10 & 11 – 2 eme Etage
Souissi – Rabat, Kingdom of Morocco

Tel: +212 537 635 656

Egypt
Road 261, no. 10, New Maadi, Cairo, Egypt

Tel: +(20) 2 2599 5200

KeyFacts Energy: SDX Energy Egypt country profile   l   SDX Energy Morocco country profile