SDX Energy Plc, MENA-focused oil and gas company, has received final approval from the Egyptian authorities to extend the Production Services Agreements governing its producing Meseda and Rabul oil fields in West Gharib concession in Egypt until 9 November 2031
Commenting on the development, Mark Reid, CEO of SDX, said, “We are very pleased to have secured this 10-year extension to the production services agreement which we estimate increases SDX's share of reserves in our core West Gharib oil asset, certified at 2.2 mmbbl in our 31 December 2019 CPR, by 60%. With a breakeven price of approximately US$20 Brent and to take advantage of the current strong oil price, we plan to commence in Q2 of this year, a drilling programme of up to twelve wells over the next three years with the goal of growing gross production back to around 3,000bbl/d. This drilling programme is in line with the capex guidance provided to the market in our 26th January 2021 update.”
The key terms of the extension, in which SDX has a 50% working interest, are as follows:
• A commitment, irrespective of Brent price, to drill six development wells by 31 December 2022 and one water injection well;
• If Brent reaches US$55 for twelve consecutive months during the extension period, four further development wells will be drilled during the extension period;
• If Brent reaches US$60 for twelve consecutive months during the extension period, two further development wells will be drilled during the extension period;
