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Gas discovery made at South Disouq SD-3X well

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Oilfield Technology,

SDX Energy Inc., the North Africa focused oil and gas company, has announced that a gas discovery has been made at its SD-3X well in the South Disouq Concession in the Nile Delta, Egypt (SDX 55% working interest and operator).

The SD-3X well was drilled to a total depth of 7842 ft and encountered 32.6 ft of net conventional natural gas pay in the Abu Madi and Kafr el Sheik horizons, with an average porosity in the pay sections of 21.7%.

The SD-3X well will now be completed as a producer in the Abu Madi horizon and then tested after the drilling rig has moved off location. In order to optimise the potential recovery from the SD-3X well, the Abu Madi horizon will be completed and produced initially before re-entering the well to complete and produce the Kafr el Sheik horizon. The Abu Madi testing is anticipated to commence between 30 – 45 days after the rig departs, depending on the availability of testing equipment. Assuming a successful test in the Abu Madi, it is anticipated that the well will be connected to the infrastructure located adjacent to the original SD-1X discovery, where production start-up is anticipated late in 4Q18.

Paul Welch, President and CEO of SDX, commented:

"The discovery of gas in both the Abu Madi and Kafr el Sheik horizons is a very positive outcome for the SD-3X well. As demonstrated by the Ibn Yunus discovery earlier this year, the Kafr el Sheik horizon is an excellent quality productive sequence. The SD-3X discovery has confirmed that this horizon is extensively present throughout the concession.

We will now analyse the data from all four wells drilled in the South Disouq campaign, as well as reprocessing and inverting the existing 3D seismic we have on the concession. Upon interpretation of this data, and completion of the new 3D survey later this year, we expect to identify further Abu Madi and Kafr el Sheik prospectivity for drilling in 2019 and 2020.

With our drilling activities completed, we will now focus on the completion of the South Disouq processing facility and pipeline infrastructure with a view to achieving first production by the end of 2018."

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