EGYPT – SDX Energy, MENA-focused oil and gas company, has announced that it has received final approval from the Egyptian authorities to extend the Production Services Agreements (PSA) governing its producing Meseda and Rabul oil fields in its West Gharib concession in Egypt until 9 November 2031.
In Egypt, SDX has a working interest in two producing assets: a 55% operated interest in the South Disouq gas field in the Nile Delta and a 50% non-operated interest in the West Gharib concession, which is located onshore in the Eastern Desert, adjacent to the Gulf of Suez.
In Morocco, SDX has a 75% working interest in five development/production concessions, all situated in the Gharb Basin.
“We are very pleased to have secured this ten-year extension to the Production Services Agreement which we estimate increases SDX’s share of reserves in our core West Gharib oil asset.”Mark Reid – CEO, SDX
The producing assets in Morocco are characterised by attractive gas prices and exceptionally low operating costs.
SDX has a strong weighting of fixed price gas assets in its portfolio with low operating costs and attractive margins throughout, providing resilience in a low commodity price environment. SDX’s portfolio also includes high impact exploration opportunities in both Egypt and Morocco.
“We are very pleased to have secured this ten-year extension to the Production Services Agreement which we estimate increases SDX’s share of reserves in our core West Gharib oil asset, certified at 2.2 million barrels in our 31 December 2019 CPR, by 60%,” Mark Reid, CEO of SDX, said.
“With a breakeven price of approximately US$20 Brent and to take advantage of the current strong oil price, we plan to commence in Q2 of this year, a drilling programme of up to twelve wells over the next three years with the goal of growing gross production back to around 3,000bbl/d.
“This drilling programme is in line with the capex guidance provided to the Market in our 26th January 2021 update. We would like to thank our partners The General Petroleum Company, a wholly owned subsidiary of the Egyptian General Petroleum Corporation, and Dublin Petroleum Limited for their valuable co-operation in agreeing this extension.”
The extension, in which SDX has a 50% working interest, includes a commitment, irrespective of Brent price, to drill six development wells by 31 December 2022 and one water injection well.
If Brent reaches US$55 for 12 consecutive months during the extension period, four further development wells will be drilled during the extension period. If Brent reaches US$60 for 12 consecutive months during the extension period, two further development wells will be drilled during the extension period.
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