In South Disouq (SDX 55% working interest and operator), the Company completed four wells during the year, three of which were conventional natural gas discoveries in the Abu Madi and Kafr el Sheik horizons.
The company has an operated 55% equity position after it completed a farm-out of the acreage to IPR in February of 2015 for the remaining 45%.
In 2018, the development lease application was approved by the relevant authorities and construction of the pipeline and central facility commenced.
Construction of the South Disouq central processing facility, pipeline and well tie-ins continued in Q1 2019 with first gas expected to be achieved in Q4 2019.

First production from the licence is expected in Q4 2019, with the Company aiming for a gross plateau production rate of c.50 MMscfe/d by Q1 2020 after an initial ramp up phase.
Subject to partner approval, a drilling campaign of up to five exploration wells is planned to commence at South Disouq in 2020. These wells will target the same Abu Madi and Kafr el Sheik prospective horizons that have seen the Company make four discoveries from the five wells drilled to date.
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Outlook For South Disouq
- The development project is progressing satisfactorily and on schedule to achieve first gas in Q4.
- SDX is aiming to achieve a gross plateau production rate of c.50 MMscfe/d by Q1 2020 after an initial ramp up phase, with the conventional natural gas being sold to the State (“EGAS”) at a price of US$2.85/Mcf.
- Prospect inventory for future drilling is expected to increase with the interpretation of the recently acquired 170km2 of 3D seismic in the southern section of the concession.
- Subject to partner approval, a drilling campaign of up to five exploration wells is planned to commence at South Disouq in 2020. These wells will target the same Abu Madi and Kafr el Sheik prospective horizons that have seen the Company make four discoveries from the five wells drilled to date.
- Gross capex in 2019 is expected to be approximately US$40.0 million (US$22.0 million net to SDX, of which approximately US$18.5 million relates to the South Disouq development activities and US$3.5 million relates to the two planned exploration wells). Post-period end, the Company has offset US$7.65 million of its accounts receivable due from EGPC against costs incurred with Egyptian State contractors on the South Disouq development.