SDX Energy (SDX) , the Middle East and North African focused oil and gas company, on Tuesday revealed that drilling at its 75% owned OYF-2 well in Morocco encountered gas above pre-drill estimates. 

The company drilled to 1210 meters, encountering commercial quantities of gas in both the upper and lower Guebbas where both targets had thickness and quality better than expected, whilst the discovery also confirmed that the company's core productive area extends to the north.

SDX estimates that around 1.3 to 1.9 cubic feet of gas is recoverable from the horizons encountered by the OYF-2 well, and said that testing is now due to take place in February.

Subject to results, the well will be tied into the company's infrastructure when required, at an estimated cost of around US$2m net to SDX.

“OYF-2 in Morocco is a very positive start, a discovery which is larger than pre drill expectations, and confirmation that our core productive area extends to the north,” said Mark Reid, CEO of SDX.

Shares in SDX Energy ticked up 2.88% to 26.75p on Tuesday morning.

Drilling has now moved on to the BMK-1 location, about 11km further north of OYF-2, this morning's statement detailed.

The company also plans one more ‘close to infrastructure’ well and two other potential ‘play-opening wells’ in the Lalla Mimouna licence, expected to be completed in March.

Meanwhile, SDX said it is preparing to drill two new wells in the South Disouq project in Egypt, of which the company holds a 55% interest in.

The first well, Salah, is due to spud mid-late February, whilst the second, Sobhi, is expected to spud April/early May.

If successful, the share of the tie-in cost is estimated at $2.5m and $1.9m, respectively, with the wells potentially adding around 200-300 barrels of daily production.  

“With the imminent commencement of drilling campaigns in South Disouq and West Gharib in Egypt, together with the ongoing drilling campaign in Morocco, we have a very busy period of activity ahead of us with three rigs drilling simultaneously,” added Reid.

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