SDX Energy, the Middle East and North Africa (MENA)-focused oil and gas company, expects its production to reach 6,750-7,000 barrels of oil equivalent per day (boe/d) in 2020, according to a statement by the company.
The company clarified that its anticipated production for 2020 is higher than 2019 by 68-74%, noting that its achieved production rate in 2019 was around 4,020 boe/d, 12% higher than 2018’s production level.
Moreover, SDX might direct a capital expenditure (capex) estimated at $25.5 million to the completion of the Moroccan 12-well drilling campaign, two exploration wells planned for South Disouq in Egypt, and up to three development wells planned for the Meseda and Rabul fields in Egypt’s West Gharb concession.
It is worth mentioning that the company’s capex in 2019 was around $40.7 million (unaudited), higher than the target by $4.5 million.
SDX CEO, Mark Reid, commented that “we have entered 2020 in a strong position with production at record levels, good monthly cash generation, a strong balance sheet and a busy work program of drilling ahead of us, which is all fully funded,” adding that “with eight wells planned for H1 2020, six of which are exploration/appraisal in nature, we are moving into a very exciting period of activity and I look forward to providing further updates in due course,” Reid added.
Considering SDX’s activities in South Disouq concession, the company succeeded in linking the field to production in Q4 2019. Accordingly, it managed to achieve high production rates because of the high performance of the Central Processing Facility (CPF) and wells at the concession. This enabled the company to accomplish an accelerated ramp up to plateau of gross 50 million cubic feet equivalent of natural gas per day (mmcfe/d) in mid-December.
In addition to that, SDX’s strong gross production achieved during the first nine months of 2019 was mainly from the new wells at Meseda, as well as the stronger performance of North Gemsa than the forecast.
“2019 was a successful year for SDX, with all key metrics being ahead of expectations, success with the drill bit and our key South Disouq development project completing on time and on budget,” Reid remarked.
For 2020, SDX plans to continue South Disouq’s preparations for two exploration wells at the same horizons encountered in the company’s four discoveries to date. The first well is expected to spud in mid/late February and complete in April 2020. In addition to that and depending on partnering discussions, a third well targeting deeper prospectivity in a potential new play fairway may be drilled later during 2020.
Furthermore, SDX is reviewing a number of development concepts depending on the size of any discovery that is made.