SDX Energy completes first phase of Morocco drilling operations

The first phase of the Morocco drilling campaign consisted of three appraisal/development wells in SDX's operated Gharb Basin acreage in Morocco (SDX: 75% working interest).

The first well, OYF-3, which spud on 30 April 2021, reached its TD at 1183 m MD on 11 May 2021. The main Guebbas reservoir target was thicker than expected and encountered a 5.2 m net gas sand. The well also encountered a 1.7 m net gas sand in a secondary zone that OYF-3 will also produce from.

The second well, KSR-17, was spud on 13 May 2021 and reached its TD at 1848 m MD on 27 May 2021. In the main Hoot reservoir, the well encountered a 5.3 m net gas sand which was slightly thinner than expected, but with very good reservoir properties.

Both OYF-3 and KSR-17 have been tested, connected, and are now producing into our infrastructure. Post-drill P50 reserves are estimated at a combined gross 0.81 billion ft³ recoverable which is in line with predrill estimates.

Finally, the third well of the campaign, KSR-18, was spud on 30 May 2021 and reached its TD of 1905 m MD on 14 June 2021. Both prognosed targets were successfully encountered, with the shallower Mid Guebbas target comprising of a 3.8 m net gas sand and the main Hoot target encountering a 13.9 m net gas sand. As expected, the main Hoot had been slightly depleted by production from a nearby well, however the well is still expected to contribute incremental volumes and deliverability from this extensive compartment. Further to these zones, a third 5.5 m net gas sand was encountered at the Base Guebbas and will contribute to production in the future when the Hoot has been depleted. KSR-18 will be tested in the coming weeks to refine volumetrics but based upon logging results, the Company expects that this too will be close to its pre-drill P50 EUR estimate of gross 0.75 billion ft3.

The second phase of the Moroccan drilling campaign is expected to commence in September/October 2021.

Mark Reid, CEO of SDX, commented: "The OYF-3, KSR-17 and KSR-18 wells in Morocco were all commercial successes, and OYF-3 and KSR-17 are already connected and producing into our infrastructure. We expect KSR-18 to be tested and connected in the next two weeks. The gross 1.5-1.6 billion ft3 reserves added by these wells is in line with pre-drill P50 estimates and it is anticipated that this will enable us to continue to deliver gas to our customers in line with their contractual requirements.

In Egypt we are expecting to commence the drilling of the IY-2 step out development well at South Disouq in the coming days, and our planning for the potentially transformational HA-1X exploration well is significantly progressed, with spud expected in 3Q21. This gross 139 billion ft3 prospective target, which has a 33% chance of success, has the potential to significantly transform the resource profile of the company. Finally, with the four well campaign in West Gharib also expected to start soon, I look forward to updating the market in the coming months on what is looking to be a very busy and exciting period of activity."

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