REG - SDX Energy PLC - Results of SAK-1 and KSR-20 wells in Morocco

SDX EnergyAnnouncement

14/11/2022 07:00

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RNS Number : 2258G  SDX Energy PLC  14 November 2022

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO
CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION
(EU) NO. 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE
EUROPEAN UNION (WITHDRAWAL) ACT 2018 AS AMENDED.

 

14 November 2022

SDX ENERGY PLC ("SDX", the "Company" or the "Group")

 

Results of SAK-1 and KSR-20 wells in Morocco

 

SDX Energy Plc (AIM: SDX), is pleased to announce a successful two well
drilling campaign in Morocco that opens up a new producing area. Further wells
are planned in Morocco for 2023 to drive production and revenue growth.

 

In Morocco, the Company announces two discoveries from the recently completed
SAK-1 and KSR-20 wells.  The SAK-1 well has already been connected to the
Company's infrastructure and testing results indicate that in place volumes
will be on the higher side of the pre-drill P50 estimate of 0.44 bcf.
Crucially, the well opens a new production area to the north-west of the
Company's historical producing area, with several other follow-on prospects
identified within the SAK cluster.

 

The KSR-20 well has also discovered gas in this well-known area and is
currently undergoing a pressure build up test.  The well will be put on
production as soon as permitting and tie in are completed and an announcement
on anticipated in place volumes will be made in due course.

 

Following these successes, and the identification of further similar drillable
prospects, the Company plans to expand its drilling operations in 2023.  To
date, over 70 prospects have been identified on the portion of Moroccan
acreage that is covered by high-quality 3D seismic, of which 25 have been
high-graded and total around 20 bcf P50 EUR unrisked.

 

Mark Reid, CEO of SDX, commented:

 

"We are pleased with the results of both the SAK-1 and KSR-20 wells.  In
addition to opening a new play fairway with numerous follow-on drillable
targets, the wells will contribute immediately to production and revenue
growth in an area where demand and gas pricing is robust. Morocco remains a
key area of potential growth for SDX and we look forward to planning further
drilling in 2023. I would also like to add my thanks to our partner ONHYM for
the provision of the excellent drilling team and the ONHYM 525 rig which was
used to great effect during the campaign."

 

 

For further information, please see the Company's website at
www.sdxenergygroup.com (http://www.sdxenergygroup.com) or the Company's filed
documents at www.sedar.com (http://www.sedar.com) .

 

For further information:

 

 SDX Energy Plc

 Mark Reid

 Chief Executive Officer

 Tel: +44 203 219 5640

 Stifel Nicolaus Europe Limited (Nominated Adviser and Broker)

 Callum Stewart

 Jason Grossman

 Ashton Clanfield

 Tel: +44 (0) 20 7710 7600

 Camarco (PR)

 Billy Clegg/Owen Roberts/Violet Wilson

 Tel: +44 (0) 203 757 4980

Glossary

 

 "bcf"  Billion cubic feet
 "EUR"  Estimated Ultimate Recovery

 

Standard

 

Estimates of reserves and resources have been prepared in accordance with the
June 2018 Society of Petroleum Engineers ("SPE") Petroleum Resources
Management System ("PRMS") as the standard for classification and reporting
with an effective date of 31 December 2021 and in accordance with National
Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI
51-101") of the Canadian Securities Administrators.

 

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 Dr Rob Cook, VP Subsurface of SDX. Dr. Cook has 30
years of oil and gas industry experience and is the qualified person as
defined in the London Stock Exchange's Guidance Note for Mining and Oil and
Gas companies. Dr. Cook holds a BSc in Geochemistry and a PhD in Sedimentology
from the University of Reading, UK. He is a Chartered Geologist with the
Geological Society of London (Geol Soc) and a Certified Professional Geologist
(CPG-11983) with the American Institute of Professional Geologists (AIPG).

 

 

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
future drilling developments and results in the Company's Moroccan concessions
should 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; receipt of
necessary permits; the sufficiency of budgeted capital expenditures in
carrying out planned activities, and the availability and cost of labour and
services.

 

All timing given in this announcement, unless stated otherwise, is indicative,
and while the Company endeavours 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; permitting risks; the 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 refer to the Principal Risks &
Uncertainties section of SDX's Annual Report for the year ended 31 December
2021, which can be found on SDX's SEDAR profile at www.sedar.com
(http://www.sedar.com) , for a description of additional risks and
uncertainties associated with SDX's business.

 

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 disclosures in this news release constitute "anticipated results" for
the purposes of NI 51-101 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, flow rate, production rates, porosity, and pay
thickness attributable to the resources of the Company. Such estimates have
been prepared by Company management 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.

Prospective Resources Data

 

The prospective resources estimates disclosed or referenced herein have been
prepared by Dr. Rob Cook, a qualified reserves evaluator, in accordance with
the SPE's Canadian Oil and Gas Evaluation Handbook and in accordance with NI
51-101. The prospective resources disclosed herein have an effective date of 1
January 2022. Prospective resources are those quantities of gas, estimated as
of the given date, to be potentially recoverable from undiscovered
accumulations through future development projects. As prospective resources,
there is no certainty that any portion of the resources will be discovered.
The chance that an exploration project will result in a discovery is referred
to as the "chance of discovery" as defined by the management of the Company.

 

There is no certainty that it will be commercially viable to produce any
portion of the resources discussed herein; though any discovery that is
commercially viable would be tied back to the Company's pipeline in Morocco
and then connected to customers' facilities within 9 to 12 months of
discovery. Based upon the economic analysis undertaken on any discovery,
management has attributed an associated chance of development of 100%.

 

There are uncertainties associated with the volume estimates of the
prospective resources disclosed herein, due to the level of information
available on prospective resources, but ranges are defined based on data from
the Company's nearby existing analogous wells. Some of the risks 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);

·      Reservoir drive mechanism;

·      Potential well deliverability; and

·      The thickness and lateral extent of the reservoir section,
currently based on 3D seismic data.

 

"P50" means that there is at least a 50% probability that the quantities
actually recovered will equal or exceed the best estimate.

 

 

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