SDX Energy Plc (LON:SDX) has highlighted a better than expected initial performance from the South Disouq field in Egypt.
The company, in its third quarter update, said that following ‘first gas’ on 7 November and production has so far risen from 25mln cubic feet per day to 35mln cubic feet per day over the first two weeks of operation.
"Achieving first gas at South Disouq earlier this month was a major milestone for SDX and it is anticipated to have a material impact on the company's cash generation going forward,” said chief executive Mark Reid.
“Furthermore, we are pleased with the performance of the wells and the facility in the first two weeks of operation and this has resulted in a rate of production increase that has exceeded our expectations.”
Group production for the nine months, ended 30 September, measured 3,501 barrels oil equivalent per day versus 3,455 boepd in the same period of last year.
The growth was the result of an 18% improvement at the Meseda field following successful drilling and in Morocco operations improved by 20% driven by increased gas consumption by customers.
Net revenue amounted to US$38mln and operating cashflow totalled US$18mln, supporting US$23mln of capex, and the company ended the period with US$13mln of cash and US$10mln undrawn from the European Bank of Reconstruction and Development (EBRD).
Reid highlighted: “We are also pleased to report that production and capex from our operations continue to be within our guided ranges and our cashflow generation, liquidity position, and balance sheet remain strong and continue to provide us with the necessary funding to pursue these remaining two medium-term strategic objectives.
“With the planned ramp-up of production in South Disouq to 50 MMscfe/d in Q1 2020, together with the drilling campaigns in Morocco and South Disouq, the remainder of 2019 and 2020 will be a very busy and exciting period for SDX and we look forward to providing the market with further updates in due course."
The SDX boss noted that the company is focussed on two strategic objectives with a 12-well programme in Morocco as well as exploration in South Disouq.