SDX Energy Inc (LON:SDX) has announced results from the KSS-2 well on the Sebou permit in Morocco (SDX 75%). KSS-2 is the sixth well in the company’s nine-well programme, with four discoveries to date. KSS-2 encountered eight net meters of high-quality reservoir, but had low gas saturation and was deemed to be non-commercial. This result is not expected to affect the company’s previously announced planned production increase in Morocco to 8-10mmscfd by the end of 2018. We recently published a detailed update on our view of Moroccan gas sales and group valuation, which stands at core NAV 58.3p/share and RENAV 65.6p/share.
KSS-2 was drilled on the upthrown side of the main bounding fault in the Ksiri area and management believes that the fault has isolated the KSS-2 well from the source rock, resulting in low gas saturations. The next well in the nine-well programme, SAH-2, is located on the downthrown side of the fault, drilling a similar structure to SDX’s recently successful wells. SDX believes that the KSS-2 well result proves that the main bounding fault provides a good seal and gives confidence in forthcoming prospects, including SAH-2.
To read the entire report Please click on the pdf File Below: