Page 13 - AfrOil Week 12 2020

AfrOil
NEWS IN BRIEF
AfrOil
UPSTREAM
SDX Energy provides update
on drilling operations in
Morocco and Egypt
SDX Energy, the MENA-focused oil and gas company, has provided an update on its drilling operations in Morocco and Egypt.
Morocco: The LMS-2 well (SDX 75% working interest) has been drilled to a measured depth of 1,190 metres, and the Company is pleased to advise that electric logging has shown that a 10.6-metre net gas reservoir with 30.9% porosity has been encountered on prognosis at the base of the H9/Srafen formation. Unlike previous gas discoveries in the south of the acreage, analyses while drilling indicated that the different ther- mogenic composition of the gas suggests that it is from a new and likely deeper source rock.
The well has been cased and completed and, when changes to COVID-19 restrictions make it possible to bring a well testing crew into the country, it will be perforated and tested to deter- mine its potential.
Egypt: The SD-12X (Sohbi) well at South Dis- ouq in Egypt (SDX 55% working interest, 100% working interest in this well) has commenced drilling operations.
Sohbi is expected to a reach its targeted depth of approximately 2,300 metres in late April and is targeting gross P50 unrisked prospec- tive resources of around 33 bcf (934.5mn cubic metres) equivalent, as estimated by manage- ment. Sohbi’s primary target is in the same Kafr el Sheikh formation that the Company’s existing Ibn Yunus well is already producing from.
If successful, the Sohbi well would 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 Process- ing Facility. On a gross basis, this tie in cost is estimated at US$3.5mn. The resource targeted by Sohbi would potentially only require one further development well. SDX will drill the Sohbi well at a 100% working interest for an estimated gross dry hole cost of US$2.3mn, which will be paid over the coming three months.
Under Clause 8.5 of the Joint Operating Agreement, “Premium to Participate in Exclu- sive Operations,” if the Company’s partner elects to participate in the well after a discovery is made, it is required to pay its full share of the well cost, plus a premium of a further 300% of this amount.
Mark Reid, CEO of SDX, commented: “We are encouraged with the initial results at LMS-2 in Morocco. However, we require this well to be perforated and tested before we can understand its potential.
“Sohbi is an exciting well for the Company, targeting the same productive formation we are already producing from in Egypt and if success- ful, it has the potential to extend the current pla- teau production of 50mn cubic feet [1.416 mcm] equivalent per day to 2024.
“I look forward to providing further updates on both wells and our plan for future drilling in due course.”
SDX Energy, March 19 2020
MIDSTREAM/DOWNSTREAM
Sound Energy provides eastern Morocco update
Sound Energy, the Moroccan focused upstream natural gas company, is pleased to provide the following Eastern Morocco update, confirm- ing receipt of a further Environmental Impact Assessment (EIA) approval and land corridor rights in respect of the Tendrara Gas Export Pipeline (TGEP).
EIA of the gas treatment plant and compres- sion station (including liquefaction): On Febru- ary 17, 2020, the Company announced its plan to pursue the first phase of TE-5 Horst develop- ment at the Tendrara Production Concession via a micro- LNG production plan. Negotiations are ongoing with equipment providers for the LNG production facility solution and with industrial customers and distributors in relation to a gas offtake agreement.
The Company is pleased to announce that it has now received the EIA approval from the Moroccan Ministry of Energy, Mines and Environment related to the building of the pro- posed gas treatment plant and compression station (CPF) at the Concession, including the option for gas liquefaction. Receipt of the CPF EIA approval follows meetings of the National
Committee from the Moroccan Ministry of Energy, Mines and Environment to review the CPF EIA held on October 10, 2019, and Janu- ary 28, 2020, and receipt of EIA approval for the 120-km TGEP connecting the proposed CPF to the Gazoduc Maghreb Europe (GME) pipeline, as announced by the Company on January 13, 2020.
Inclusion of gas liquefaction within the CPF EIA approval enables the LNG development planned as Phase 1 of the Concession field devel- opment plan, with the TGEP-led full field devel- opment of the Concession following as Phase 2.
Tendrara Gas Export Pipeline corridor rights: The Company continues to progress the TGEP led full field development of the Con- cession alongside the LNG production strategy and advises that, following discussions with representatives of Morocco’s Ministry of Inte- rior and of the Forestry Department to obtain rights through a long-term lease agreement for a 50-metre wide corridor along the entire 120-km lengthoftheTGEP,formallandaccessapprovals have been received from the Ministry of Interior and the Forestry Department and the Company will now seek to agree the tariff for the land access with the Ministry.
The land access approvals now received relate to land covering 99.9% of the entire length of the 50-metre wide TGEP corridor and the remain- ing land approvals required, covering land required for the three principal blacktop roads and five river crossings along the TGEP route, are to be sought at a later date, after Final Invest- ment Decision is taken.
The Company believes that the developments described above are important milestones in the process of developing and commercialising the Concession and as the Company progresses towards the Final Investment Decision (when binding development capital commitments are to be made) for each phase of the Concession field development.
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