It comes after the Al Amir SE 23 well flowed more than 3,000 barrels of oil per day.
Cantor rates SDX as a ‘buy’ and with a C$4.00 target price the broker sees some 700% upside to the current price of around 50 Canadian cents.
“This week’s well result is particularly significant, not just in the context of volume or quality of oil produced on test, but how the company has consolidated its technical understanding of its Egyptian acreage following the recent merger,” analyst Sam Wahab said in a note.
He added: “This week’s result was considerably above the market’s expectations, with the well expected to be another strong producer from the Shagar zone.
“Drilling costs were 30% lower than previous wells on a comparative basis, making it both a technical and commercial success.”
Wahab highlighted that the NW Gemsa operation has production costs of just $5 per barrel, so the new production will be a material boost to the field’s economics.
Furthermore, according to Cantor, SDX’s production assets are worth C$2.39 per share.
On Monday, SDX revealed excellent well results from the North West Gemsa field, onshore Egypt.
The Al Amir SE 23 well encountered a significant oil bearing reservoirs, in the Kareem Rahmi and Shagar formations. Some 23 feet of oil pay was measured in the Shagar, while 28 feet of pay was measured in the Rahmi.
Production was brought online from the Shagar and during testing flow rates were measured at 3,860 barrels of oil per day with 2.55mln cubic feet of gas per day.
Paul Welch, SDX chief executive, said: “The AASE23 well results were excellent and the well is expected to be another strong producer from the Shagar.
“Drilling costs for the AASE-23 were down by 30%, on a comparative basis with previous wells, making this well both a technical and also commercial success.
“The AASE-23 is the first of two development wells to be drilled in the field this year.”
Welch added that the drill rig will now moving on to the next location in the next few days.