SDX Energy has begun its 12-well development campaign on the West Gharib concession, in Egypt’s Eastern Desert.
The first well in the drive is the MSD-12 infill development well, on the Meseda field. The company spudded the well on October 16, it is targeting the Asl formation at around 975 metres.
Work will take around four weeks to drill, complete and tie the well in to existing infrastructure, it said. The infill well will cost $0.9-1 million and should begin producing at around 300 barrels per day gross. SDX expects to announce results in mid-November for MSD-12.
Payback from the well would be less than one year at current prices, SDX said. It has a 50% working interest in the development.
The entire drilling campaign aims to increase production from 2,400 bpd to 3,500-4,000 bpd by early 2023.
“In today’s higher oil price environment, I am excited to announce the spudding of the first well in a 12 well infill development campaign on our West Gharib oil fields in Egypt,” said SDX CEO Mark Reid.
Noting current oil prices, Reid went on to say West Gharib was “a very high margin asset in our portfolio and the MSD-21, and subsequent wells, will boost the production and cashflow from these fields in the coming months. I look forward to updating the market further as the campaign progresses.”
SDX produced 5,931 boepd in the first half of the year, around 3% higher than it had expected – although down from 2020 levels. Natural decline at West Gharib was one of the reasons for lower production.
The company expects to spend $15.8mn in Egypt, on the South Disouq and West Gharib areas, in 2021. It plans to drill four infill wells and one water injector on West Gharib this year, after winning a 10-year extension to the licence in March.