UK oil and gas exploratory firm SDX Energy announced this morning that production had started at the company’s South Disouq concession in Egypt.
Each of the site’s four discovery wells have been tested and gas has been flowing since the 7 November.
All gas production at the site, in which SDX owns a 55 per cent stake, will be sold to Egypt’s national gas company Egas.
The company said that initial flow rates were in line with expectations and that SDX will gradually ramp up production with a view to achieving its targeted production rate of 50m standard feet per day in the first quarter of 2020.
The firm also announced that interim chief executive Mark Reid had taken up the role permanently, with Nick Box becoming chief financial officer.
Reid said: “The Company is pleased to announce the commencement of production at our South Disouq concession in Egypt.
“Production, which is coming on stream in line with our previous guidance, will result in a material increase to Company’s cash flow going forward. We look forward to providing the market with further updates in due course.”
SDX’s primary focus is the Middle East and North Africa, with three producing assets across Egypt.
Analysts at SP Angel welcomed the news, saying: “A plateau targeted gross production rate of 50MMscfe/d will provide the company with a material boost to operating cash flows ahead of a drilling campaign of up to five exploration wells in 2020 on the field.
“These wells will target the same Abu Madi and Kafr el Sheik prospective horizons that have seen the company make four discoveries from the five wells drilled to date.
“Mark Reid’s appointment to CEO is another positive in our view, bringing a wealth of financial and sector experience to this key position ahead of an active period for the company.”
Shares in SDX rose 3.6 per cent this morning.
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