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SDX Energy well yields uncommercial gas reservoir
SDX Energy announced on Wednesday that its Moroccan KSS-2 well drilling project has been unsuccessful, after its gas reserves were not deemed to be commercial.
The well on the Sebou permit is the sixth of the company's nine well campaign, of which four wells have yielded commercial discoveries, and the company does not expect its failure to impact upon SDX's planned production increase.
Paul Welch, chief executive of SDX, said: "Whilst the KSS-2 well was not a commercial success, we are viewing this one result in the context of what is already a very successful drilling campaign with four out of six discoveries to date. Using directional drilling equipment for the first time in the basin, we drilled a step out location in order to try to prove up a new concept, and potentially new volumes."
SDX said that the low gas saturations in the KSS-2 well are due to a main bounding fault which isolated the well from the source rock.
"Whilst KSS-2 was not successful, our belief is that this result proves that the main bounding fault provides a good seal and therefore gives us a further confidence in the forthcoming prospects. We are looking forward to drilling the final three wells in this programme and reporting on their results in due course," said Welch.
The next well SDX is targeting is SAH-2, which is located on the downthrown side of the fault and has a similar structure to the previous successful well which SDX believes means it has a higher probability of being commercially charged.
SDX Energy is focused on exploration, development and operation of oil and gas properties and holds high impact exploration prospects in Egypt and Morocco, according to its company website.
As of 1024 GMT, SDX's shares were down 3.23% at 48.00p.