Page 12 - AfrOil Week 17 2020

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NEWS IN BRIEF
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SDX Energy announces successful flow rate test at Sobhi discovery well in Egypt
SDX Energy, the MENA-focused oil and gas company, has provided an update on well-test- ing operations at the SD-12X (Sobhi; SDX 100% working interest) discovery well in the South Disouq Exploration Permit onshore Nile Delta, Egypt (SDX 55% working interest).
The drill stem test (DST) at the Sobhi well began with a step-rate test of one hour achiev- ing a maximum rate of 25mn cubic feet (708,000 cubic metres) per day on a 54/64” choke. This initial flow test was followed by a three hour period flowing at a stable rate of 15 mmscf/d on a 28/64” choke and then a further four hours flowing at a stable rate of 10 mcf (280,000 cubic metres) per day on a 16/64” choke. The well was then shut in for a 12-hour build-up period dur- ing which pressure continued to increase back to pre-test levels.
From an initial review of the well-test data, it is anticipated that when connected, the well will produce at an optimum stabilised rate of 10-12 mcf (280,000-340,000 cubic metres) per day, which is in line with the nearby Ibn Yunus-1X producing well. The Sobhi well is expected to produce mostly dry gas, as opposed to gas and condensate.
Sobhi will be subject to a longer rig-less test in the coming weeks which will provide more data to help determine the recoverable volume in the discovery, which at present management estimates to be 24bn cubic feet (680mn cubic metres) of recoverable resource. The exact tim- ing of the rig-less test will be dependent on the timing of the mobilisation of equipment which may be impacted by ongoing Covid-19 restric- tions in the region.
Management expect that the Sobhi well will be tied in during 2021 via a 5.8-km tie-in to the Ibn Yunus-1X location, where an existing flow- line connects to the South Disouq Central Pro- cessing Facility. On a gross basis, the tie-in cost is estimated at $3.5mn. The discovery will poten- tially only require one further development well to be drilled, which will not be necessary for another two to three years. SDX drilled the Sobhi well at a 100% working interest and the total cost of the well, including the cost to complete, is esti- mated at $3.7mn. Under Clause 8.5 of the Joint Operating Agreement, ‘Premium to Participate in Exclusive Operations’, if the Company’s part- ner elects to participate in the well now that a discovery has been made, it is required to pay its
full 45% share of the well cost, plus a premium of a further 300% of this amount.
Mark Reid, CEO of SDX, commented: “We are pleased with these initial well test results which confirms that we have a commercial dis- covery at the Sobhi well. This discovery increases our South Disouq 2P reserves by approximately 50% given that we sole risked the well. Further- more, Sobhi has the potential to extend the current South Disouq plateau production of 50 mmscfe/d through to 2023/24 with a low-cost tie in to our existing gas processing plant. To have a commercial gas discovery of this scale at South Disouq is especially pleasing in the current envi- ronment, as our low cost, fixed price gas develop- ment will continue to be highly cash generative for longer.”
SDX Energy, April 24 2020
Tanzania: Aminex granted
extension for Mtwara
licence area
Aminex has formally received the extension of the Mtwara Licence from the Ministry of Energy of Tanzania; one of the last remaining conditions required to close the Farm-Out Agreement with ARA Petroleum Tanzania which will see the Company carried for up to $35mn of its share of costs associated with the development of the Ntorya field, effectively carrying the Company through to material gas production in Tanzania.
The extension, which was applied for in late 2017, is valid for one year. Under the terms of the extension the Company, through the Ruvuma PSA Joint Venture, is committed to perform the following works during the extension period:
acquire 200 square km (surface coverage) of 3D seismic (minimum expenditure of $7mn); drill the Chikumbi-1 exploration well (minimum expenditure of $15mn); complete the negotia- tion of the Gas Terms for the Ruvuma PSA with the Tanzania Petroleum Development Corp.; using the data gathered from Chikumbi-1 and the seismic acquisition, prepare and submit an application for a Development Licence for the Ntorya Location area.
The Company, with its joint venture part- ners, will continue to prepare for this work programme, having already performed many pre-drilling and pre-seismic technical planning and contractual acquisition activities.
It is acknowledged by all parties that the full work programme is unlikely to be completed during this extension period and the Company will therefore apply for an additional exten- sion(s) as necessary and as permissible under the current legislation.
John Bell, Chairman of Aminex, commented: “With this Licence extension granted, we now have line of sight towards the development of a nationally important resource with the drilling of the Chikumbi-1 well. Furthermore, this well includes, as a primary objective, the exploration of promising deeper horizons. Fortunately, gas prices in Tanzania are not linked to the price of crude oil and given the shortage of gas, demand is strong. We have long since believed in the value of this field to Tanzania and to the Aminex share- holders and are delighted, at long last, to once again be moving into the growth and operational phase that will further de-risk the 763bn cubic feet [21.607mn cubic metres] of 2C resources at the Ntorya field and propel the Company towards long-term sustainable cash flows.” Aminex, April 27 2020
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Week 17 29•April•2020