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Testing time for SDX Energy
SDX Energy (SDX:AIM) 60p
Gain to date: 56.9%
Original entry point: 38.23p, 2 February 2017
A negative reaction to the latest results from drilling on SDX Energy’s (SDX:AIM) South Disouq concession in Egypt’s Nile Delta is eating into the gains on our trade but we remain bullish.
Chief executive Paul Welch told an audience at a Shares investor evening in Edinburgh on 15 May that testing of the gas discovery at South Disouq will now be completed before Ramadan begins on 26 May, having previously anticipated the work would have to wait until after the conclusion of the religious festival.
The outcome from this testing could act as a catalyst for the shares after they fell on news (5 May) that the SD-1X well, while uncovering a shallower gas find, did not uncover oil in commercial quantities in deeper intervals.
Welch says the existence of a working petroleum system in these same intervals means oil could be produced from elsewhere in the concession. A working petroleum system means all the geological elements required to produce hydrocarbons are present.
The company plans further drilling to prove up the oil potential in the field and has already scheduled a seven-well programme in Morocco in the remainder of 2017.
Recent weakness is an opportunity to top up. (TS)