SDX Energy Inc (LON:SDX) (CVE:SDX) saw its shares gain nearly 5% today after the oil firm announced its second new discovery this month, with the KSR-14 well in Morocco unearthing gas in four intervals.
The better-than-expected well encountered a total of 20 metres of conventional gas pay, in the Guebbas and Hoot formations, and analysis is underway to determine an accurate estimate of recoverable gas volumes.
It is anticipated that the well will be connected to infrastructure and start producing in around 30 days.
"This positive result follows the company's recent oil discovery at our West Gharib concession in Egypt and demonstrates the real momentum developing across our portfolio,” said Paul Welch, SDX chief executive.
“This outcome in Morocco is an excellent start to our nine well programme, where we are targeting an increase in our local gas sales volumes in Morocco by up to 50%.
“I look forward to reporting on the flow rates from today's KSR-14 discovery and last week's Rabul 2 discovery in the near term along with updating our shareholders on further progress on our South Disouq Development activities in due course."
In a note to clients, Numis Securities analysts Justin Chan said: "This was a development well so the fact gas was encountered is not surprising, but the company states the initial results have exceeded pre-drill expectations."
Egypt oil discovery
SDX last week revealed that the Rabul-2 well, in the West Gharib concession, Egypt, had made a new heavy oil discovery.
Rabul-2 hit some 101.5 feet of net oil pay across the Yusr and Bakr formations, and the company expects the well will be completed as a new producer connected to processing facilities at the Meseda field.
“The well came in ahead of expectations, based upon the results of the offset Rabul 1 location. The ultimate potential in this new Bakr structure is currently under review and will be better understood once the well is completed and tested,” Welch said last week.
In afternoon trading today, SDX shares were 4.9% higher at 53.5p.
-- Adds analysts comment, share price --